Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 28, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | IRTC | ||
Entity Registrant Name | iRhythm Technologies, Inc. | ||
Entity Central Index Key | 1,388,658 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 22,152,637 | ||
Entity Public Float | $ 314 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 51,643 | $ 25,208 |
Short-term investments | 54,407 | |
Accounts receivable, net | 9,406 | 5,577 |
Inventory | 1,390 | 1,145 |
Prepaid expenses and other current assets | 1,671 | 808 |
Restricted cash | 91 | 91 |
Total current assets | 118,608 | 32,829 |
Investments, long-term | 10,981 | |
Property and equipment, net | 4,653 | 2,036 |
Goodwill | 862 | 862 |
Other assets | 3,052 | 2,145 |
Total assets | 138,156 | 37,872 |
Current liabilities: | ||
Accounts payable | 2,103 | 1,459 |
Accrued liabilities | 10,165 | 6,699 |
Deferred revenue | 947 | 506 |
Accrued interest, current portion | 111 | |
Total current liabilities | 13,215 | 8,775 |
Debt | 32,227 | 30,552 |
Deferred rent, noncurrent portion | 26 | 28 |
Accrued interest, net of current portion | 126 | 96 |
Preferred stock warrant liabilities | 2,949 | |
Total liabilities | 45,594 | 42,400 |
Commitments and contingencies (Note 7) | ||
Convertible preferred stock, $0.001 par value – zero and 11,392,882 shares authorized at December 31, 2016 and 2015, respectively; zero and 11,046,146 shares issued and outstanding at December 31, 2016 and 2015, respectively; aggregate liquidation preference of $0, and $117,495 at December 31, 2016 and 2015, respectively | 97,096 | |
Stockholders’ equity (deficit): | ||
Preferred stock, $0.001 par value – 5,000,000 and zero shares authorized at December 31, 2016 and 2015, respectively; and none issued and outstanding at December 31, 2016 and 2015, respectively | ||
Common stock, $0.001 par value – 100,000,000 and 18,528,913 shares authorized at December 31, 2016 and 2015, respectively; 22,139,346 and 1,410,565 shares issued and outstanding at December 31, 2016 and 2015, respectively | 22 | 1 |
Additional paid-in capital | 219,718 | 4,641 |
Accumulated other comprehensive loss | (9) | |
Accumulated deficit | (127,169) | (106,266) |
Total stockholders’ equity (deficit) | 92,562 | (101,624) |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ 138,156 | $ 37,872 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Temporary equity, shares authorized | 11,392,882 | |
Temporary equity, shares issued | 11,046,146 | |
Temporary equity, shares outstanding | 11,046,146 | |
Temporary equity, liquidation preference | $ 117,495 | |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 18,528,913 |
Common stock, shares issued | 22,139,346 | 1,410,565 |
Common stock, shares outstanding | 22,139,346 | 1,410,565 |
Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 0 | 11,392,882 |
Temporary equity, shares issued | 0 | 11,046,146 |
Temporary equity, shares outstanding | 0 | 11,046,146 |
Temporary equity, liquidation preference | $ 0 | $ 117,495 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 64,072 | $ 36,140 | $ 21,749 |
Cost of revenue | 20,883 | 14,700 | 10,591 |
Gross profit | 43,189 | 21,440 | 11,158 |
Operating expenses: | |||
Research and development | 7,150 | 6,349 | 5,698 |
Selling, general and administrative | 51,621 | 36,722 | 20,225 |
Total operating expenses | 58,771 | 43,071 | 25,923 |
Loss from operations | (15,582) | (21,631) | (14,765) |
Interest expense | (3,248) | (1,059) | (774) |
Other expense, net | (2,073) | (109) | (293) |
Net loss | $ (20,903) | $ (22,799) | $ (15,832) |
Net loss per common share, basic and diluted | $ (3.95) | $ (16.57) | $ (12.05) |
Weighted-average shares used to compute net loss per common share, basic and diluted | 5,285,847 | 1,376,106 | 1,314,294 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net Loss | $ (20,903) | $ (22,799) | $ (15,832) |
Other comprehensive loss: | |||
Unrealized loss on available-for-sale securities | (9) | ||
Comprehensive loss | $ (20,912) | $ (22,799) | $ (15,832) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Initial Public Offering | Convertible Preferred Stock | Convertible Preferred StockInitial Public Offering | Common Stock | Common StockInitial Public Offering | Additional Paid-In Capital | Additional Paid-In CapitalInitial Public Offering | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2013 | $ (65,590) | $ 1 | $ 2,044 | $ (67,635) | ||||||
Balance, Shares at Dec. 31, 2013 | 1,287,654 | |||||||||
Balance, Convertible Preferred Stock at Dec. 31, 2013 | $ 67,785 | |||||||||
Balance, Convertible Preferred Stock, Shares at Dec. 31, 2013 | 7,680,417 | |||||||||
Issuance of Series E convertible preferred stock for cash, net of issuance costs | $ 17,229 | |||||||||
Issuance of Series E convertible preferred stock for cash, net of issuance costs, Shares | 1,977,450 | |||||||||
Issuance of common stock upon the exercise of options | $ 50 | 50 | ||||||||
Issuance of common stock upon the exercise of options, Shares | 38,982 | 38,982 | ||||||||
Stock-based compensation expense | $ 828 | 828 | ||||||||
Net loss | (15,832) | (15,832) | ||||||||
Balance at Dec. 31, 2014 | (80,544) | $ 1 | 2,922 | (83,467) | ||||||
Balance, Shares at Dec. 31, 2014 | 1,326,636 | |||||||||
Balance, Convertible Preferred Stock at Dec. 31, 2014 | $ 85,014 | |||||||||
Balance, Convertible Preferred Stock, Shares at Dec. 31, 2014 | 9,657,867 | |||||||||
Issuance of Series E convertible preferred stock for cash, net of issuance costs | $ 12,082 | |||||||||
Issuance of Series E convertible preferred stock for cash, net of issuance costs, Shares | 1,388,279 | |||||||||
Issuance of common stock upon the exercise of options | $ 309 | 309 | ||||||||
Issuance of common stock upon the exercise of options, Shares | 84,300 | 83,929 | ||||||||
Stock-based compensation expense | $ 1,410 | 1,410 | ||||||||
Net loss | (22,799) | (22,799) | ||||||||
Balance at Dec. 31, 2015 | $ (101,624) | $ 1 | 4,641 | (106,266) | ||||||
Balance, Shares at Dec. 31, 2015 | 1,410,565 | 1,410,565 | ||||||||
Balance, Convertible Preferred Stock at Dec. 31, 2015 | $ 97,096 | $ 97,096 | ||||||||
Balance, Convertible Preferred Stock, Shares at Dec. 31, 2015 | 11,046,146 | 11,046,146 | ||||||||
Issuance of common stock upon the exercise of options | $ 132 | $ 1 | 131 | |||||||
Issuance of common stock upon the exercise of options, Shares | 57,067 | 56,827 | ||||||||
Issuance of preferred stock upon exercise of warrants | $ 457 | |||||||||
Issuance of preferred stock upon exercise of warrants, Shares | 31,359 | |||||||||
Issuance of common stock in connection with initial public offering, net of offering costs | $ 110,721 | $ 7 | 110,714 | |||||||
Issuance of common stock in connection with initial public offering, net of offering costs, Shares | 7,238,235 | |||||||||
Conversion of convertible preferred stock to common stock in connection with initial public offering | $ 97,553 | $ (97,553) | $ 13 | $ 97,540 | ||||||
Conversion of convertible preferred stock to common stock in connection with initial public offering, Shares | (11,077,505) | 13,375,333 | ||||||||
Conversion of convertible preferred stock warrants to common stock warrants in connection with initial public offering | 4,821 | 4,821 | ||||||||
Issuance of common stock upon net exercise of warrants, Shares | 58,386 | |||||||||
Stock-based compensation expense | 1,871 | 1,871 | ||||||||
Net loss | (20,903) | (20,903) | ||||||||
Unrealized loss on investments | (9) | $ (9) | ||||||||
Balance at Dec. 31, 2016 | $ 92,562 | $ 22 | $ 219,718 | $ (127,169) | $ (9) | |||||
Balance, Shares at Dec. 31, 2016 | 22,139,346 | 22,139,339 | ||||||||
Balance, Convertible Preferred Stock at Dec. 31, 2016 | $ 0 | |||||||||
Balance, Convertible Preferred Stock, Shares at Dec. 31, 2016 | 0 |
Consolidated Statements of Con7
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - Convertible Preferred Stock - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Issuance of Series E convertible preferred stock for cash, per share | $ 8.77 | $ 8.77 |
Issuance of Series E convertible preferred stock for cash, issuance costs | $ 92 | $ 115 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net Loss | $ (20,903) | $ (22,799) | $ (15,832) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 568 | 492 | 242 |
Stock-based compensation | 1,871 | 1,410 | 828 |
Amortization of debt discount and issuance costs | 251 | 116 | 111 |
Amortization (accretion) on investments | 6 | ||
Loss on disposal of assets | 10 | 7 | |
Change in accrued interest | (64) | (89) | |
Provision for bad debt and contractual allowance | 4,686 | 1,557 | 401 |
Change in fair value of preferred stock warrant liabilities | 2,123 | 111 | 291 |
Non-cash interest expense | 1,481 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (8,515) | (1,281) | (2,565) |
Inventory | (245) | (327) | (71) |
Prepaid expenses and other current assets | (863) | (506) | (35) |
Other assets | (1,235) | (491) | (1,166) |
Accounts payable | 305 | 132 | 703 |
Accrued liabilities | 3,380 | 3,522 | 1,399 |
Deferred rent | (2) | 28 | (28) |
Deferred revenue | 441 | 85 | 178 |
Net cash used in operating activities | (16,651) | (18,005) | (15,626) |
Cash flows from investing activities | |||
Purchases of property and equipment | (2,763) | (1,787) | (539) |
Purchases of available-for-sale investments | (65,403) | ||
Net cash used in investing activities | (68,166) | (1,787) | (539) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock upon exercise of stock options, net of repurchases | 132 | 309 | 50 |
Proceeds from issuance of common stock upon exercise of warrants | 206 | ||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 12,134 | 17,229 | |
Payments of deferred offering costs | (3,522) | (5) | |
Proceeds from long-term debt, net of debt discount and issuance costs | 29,018 | 4,905 | |
Repayments of long-term debt | (4,905) | (4,500) | |
Proceeds of issuance of common stock upon initial public offering | 114,436 | ||
Net cash provided by financing activities | 111,252 | 36,382 | 17,684 |
Net increase in cash and cash equivalents | 26,435 | 16,590 | 1,519 |
Cash and cash equivalents, beginning of year | 25,208 | 8,618 | 7,099 |
Cash and cash equivalents, end of year | 51,643 | 25,208 | 8,618 |
Supplemental disclosures of cash flow information | |||
Interest paid | 1,591 | 343 | 318 |
Non-cash investing and financing activities | |||
Issuance of warrants to purchase preferred stock | 44 | $ 98 | |
Property and equipment included in accounts payable | 423 | ||
Deferred offering costs included in accounts payable and accrued liabilities | 188 | 265 | |
Conversion of preferred stock to common stock | 97,553 | ||
Conversion of preferred stock warrants to common stock warrants | $ 4,821 | ||
Convertible Preferred Stock | |||
Non-cash investing and financing activities | |||
Series E convertible preferred stock issuance costs included in accrued liabilities | 52 | ||
Revolving Line of Credit | |||
Cash flows from financing activities | |||
Payments of issuance costs for revolving line of credit | $ (169) |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business iRhythm Technologies, Inc. (the “Company”) was incorporated in the state of Delaware in September 2006. The Company is a commercial-stage digital healthcare company redefining the way cardiac arrhythmias are clinically diagnosed by combining wearable biosensing technology with cloud-based data analytics and machine-learning capabilities. The Company commenced commercial introduction of its products in the United States in 2009 following clearance by the U.S. Food and Drug Administration. The Company’s headquarters are based in San Francisco, California, and the Company has manufacturing facilities in Cypress, California, and clinical centers in Lincolnshire, Illinois and Houston, Texas. In March 2016, the Company formed a wholly-owned subsidiary in the United Kingdom. The Company manages its operations as a single operating segment. Substantially all of the Company’s assets are maintained in the United States. The Company derives substantially all of its revenue from sales to customers in the United States, based upon the billing address of the customer. Reverse Stock Split On October 4, 2016, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of the Company’s issued and outstanding common stock at a 1-for- 5.882698 ratio, which was effected on October 5, 2016. The par value and authorized shares of common stock and convertible preferred stock were not adjusted as a result of the reverse split. All issued and outstanding common stock, options to purchase common stock and per share amounts contained in these consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented. Initial Public Offering The Company’s initial public offering (“IPO”) of 7,238,235 shares of common stock was effected through a registration statement on Form S-1 (Registration Nos. 333-213773 and 333-214179), which was declared effective on October 19, 2016. The initial public offering closed on October 25, 2016 and resulted in net proceeds of approximately $110.7 million, after deducting underwriting discounts and commissions of $8.6 million and other expenses of $3.7 million. In October 2016, immediately upon the Company’s sale of its common stock in the initial public offering |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are consolidated for the year ended December 31, 2016 and include the accounts of iRhythm Technologies, Inc. and its wholly-owned subsidiary, iRhythm Technologies Ltd., established in March 2016. All intercompany accounts and transactions have been eliminated. All accompanying financial statements and disclosures for the years ended December 31, 2015 and December 31, 2014 include only the accounts of iRhythm Te chnologies, Inc. The financial statements of iRhythm Technologies Ltd. use the U.S. dollar as the functional currency Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances for revenue, allowance for doubtful accounts, the useful lives of property and equipment, the recoverability of long-lived assets including the estimated usage of the printed circuit board assemblies (“PCBAs”), the valuation of deferred tax assets, the fair value of the Company’s preferred and common stock and stock-based compensation. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results may differ from those estimates. Fair Value of Financial Instruments The carrying amounts of certain of the Company’s financial instruments, which includes cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, approximate fair value due to their short maturities. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than 365 days from the date of acquisition. Long-term investments have maturities greater than 365 days as of the balance sheet date. All investments are carried at fair value based upon quoted market prices. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other comprehensive loss. The cost of available-for-sale securities sold is based on the specific-identification method. Realized gains and losses are included in earnings, and are derived for specific-identification method for determining the costs of investments sold. Restricted Cash Restricted cash consists of certificates of deposit held with a financial institution as security deposits for building leases, and is included in current assets on the Company’s consolidated balance sheets. Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowance Accounts receivable consists of amounts due to the Company from institutions, government payors and commercial insurance payors as a result of the Company’s normal business activities. Accounts receivable is reported on the balance sheet net of an estimated allowance for doubtful accounts and contractual allowance. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical collections, review of specific outstanding claims, consideration of relevant qualitative factors and an established allowance percentage by aging category. The Company writes off amounts against the allowance for doubtful accounts when they are deemed to be uncollectible. Increases and decreases in the allowance for doubtful accounts are included as a component of selling, general and administrative expenses. The Company establishes a contractual allowance, which is a reduction in revenue, for estimated uncollectible amounts from Centers for Medicare & Medicaid Services (“CMS”), and contracted third-party commercial payors. The following table presents the changes in the allowance for doubtful accounts: December 31, December 2016 2015 Balance, beginning of year $ 1,125 $ 470 Add: provision for doubtful accounts 1,960 1,177 Less: write-offs, net of recoveries and other adjustments (1,293 ) (522 ) Balance, end of year $ 1,792 $ 1,125 The following table presents the changes in the contractual allowance: December 31, December 31, 2016 2015 Balance, beginning of year $ 338 $ 91 Add: contractual allowances 2,726 380 Less: write-offs, net of recoveries and other adjustments (724 ) (133 ) Balance, end of year $ 2,340 $ 338 Management reviews and updates its estimates for the allowance for doubtful accounts and the contractual allowance periodically to reflect its experience regarding historical collections. If management were to make different judgments or utilize different estimates in the allowance for doubtful accounts and the contractual allowance, differences in the amount of reported selling, general and administrative expenses and revenue could result, respectively. Concentrations of Risk Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents and investments are deposited with one financial institution in the United States of America. At times, such deposits may be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, United States Government securities, corporate notes, commercial paper and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. The Company has not experienced any material losses on its deposits of cash and cash equivalents or investments. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base and their dispersion across many geographies. The Company does not require collateral. The Company records an allowance for doubtful accounts when it becomes probable that a receivable will not be collected. Government agencies, including CMS and the Veterans Administration, accounted for 40%, 41% and 30% of the Company’s revenue for the years ended December 31, 2016, 2015 and 2014, respectively. Accounts receivable related to federal government agencies accounted for 27% and 30% at December 31, 2016 and 2015, respectively. Supply Risk The Company relies on single suppliers for the supply of its reusable printed circuit board assemblies, disposable housings, instruments and other materials used to manufacture the ZIO Patch and the adhesive that binds the ZIO Patch to a patient’s body. These components and materials are critical, and there would be a considerable delay in finding alternative sources of supply. Inventory Inventory is stated at the lower of cost or market, cost being determined on a standard cost basis for material costs and on actual cost basis for labor and overhead, which approximates actual cost on a first in, first out (“FIFO”) basis, and market being determined as the lower of replacement cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Internal-Use Software The Company capitalizes costs related to internal-use software during the application development stage. Costs related to planning and post implementation activities are expensed as incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life, which is up to five years. The Company evaluates the useful lives of these assets on an annual basis, and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized internal-use software costs are classified as a component of property and equipment. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of tangible and identifiable intangible net assets acquired in business combinations. Goodwill is tested for impairment on an annual basis and at any other time if events occur or circumstances indicate that the carrying amount of goodwill may not be recoverable. Such events or circumstances may include significant adverse changes in the general business climate, among other things. The impairment test is performed by determining the enterprise fair value of the Company, which is primarily based on the Company’s public market capitalization. If the Company’s carrying value, as a one reporting unit entity, is less than its fair value, then the fair value is allocated to all of its assets and liabilities (including any unrecognized intangible assets) as if the fair value was the purchase price to acquire the Company. The excess of the fair value over the amounts assigned to the Company’s assets and liabilities is the implied fair value of the goodwill. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. The Company did not record any charges related to goodwill impairment in any of the periods presented in these consolidated financial statements. Impairment of Long-Lived Assets The Company annually reviews long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. To date, there have been no such impairments of long-lived assets. Other Assets Included in the other assets are printed circuit board assemblies, or PCBAs, totaling $2.8 million and $1.6 million as of December 31, 2016 and 2015, respectively. The Company uses a PCBA in each wearable device and it is used numerous times. Each time the PCBA is used in a wearable device, a portion of the cost of the PCBA is recorded as a cost of revenue. The Company has based its estimates of how many times a PCBA can be used on testing in research and development, loss rates, product obsolescence, and the amount of time it takes the device to go through the manufacturing, shipping, customer shelf and patient wear time and upload process. The Company periodically evaluates the use estimate. Deferred Offering Costs Deferred offering costs, which consisted primarily of legal, accounting, printer and filing fees related to the IPO, were capitalized. As of December 31, 2015, the Company capitalized $0.3 million of deferred offering costs in other long-term assets on the balance sheet. Deferred offering costs of $3.7 million were offset against IPO proceeds upon the completion of the offering in October 2016. Preferred Stock Warrant Liabilities The Company measured freestanding warrants to purchase shares of its convertible preferred stock at fair value, and recorded the related amounts as liabilities, because the shares underlying the warrants could obligate the Company to transfer assets to the holders at a future date under certain circumstances such as a deemed liquidation event. The fair value of the preferred stock warrants was remeasured at each balance sheet date, and any change in fair value was included in earnings. Such charges were included in other expense, net in the consolidated statements of operations and comprehensive loss. In connection with the Company’s IPO, the Company remeasured the liability at the time of the IPO, and then reclassified the redeemable convertible preferred stock warrant liability to additional paid-in capital, as these warrants converted to common stock warrants. As of December 31, 2016, there were no convertible preferred stock warrants outstanding, and 217,245 common stock warrants were outstanding. Comprehensive Loss Comprehensive loss represents all changes in stockholders’ equity (deficit) except those resulting from and distributions to stockholders. The Company’s unrealized gains and losses on available-for-sale securities represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive loss. Revenue Recognition The Company’s devices, cardiac rhythm monitors, have a wear period for up to 14 days for the ZIO Patch or 30 days for the ZIO Event Card. The Company’s services, consisting of the delivery of reports containing analysis of data captured by the physical device to the prescribing physician, are generally billable at the start of the wear period or when reports are issued to physicians, depending on the service provided. For the ZIO Event Card, the Company recognizes revenue on a straight-line basis over the applicable wear period, as the event monitoring results are delivered to physicians. For the ZIO Service, the Company recognizes the revenue at the time that a report is delivered to a physician. For all services performed, the Company considers whether or not the following revenue recognition criteria are met: persuasive evidence of an arrangement exists and delivery has occurred or services have been rendered. For services performed for customers the Company invoices directly, additional revenue recognition criteria include that the price is fixed and determinable and collectability is reasonably assured; for customers in which the Company submits claims to third-party commercial and governmental payors for reimbursement, the Company recognizes revenue only when a reasonable estimate of reimbursement can be made. The assessment of whether a reasonable estimate of reimbursement can be made requires significant judgment by management. Where management’s judgment indicates a reasonable estimate of reimbursement can be made, revenue is recognized upon delivery of the patient report for the ZIO Service and straight-line for the ZIO Event Card. To date, the Company has not been able to estimate revenue for third-party payors for which it does not have a contracted rate, and therefore, revenue has been recognized on the earlier of notice or cash receipt. Some patients have out-of-pocket costs for amounts not covered by their insurance carrier, and the Company may bill the patient directly for these amounts in the form of co-payments and co-insurance in accordance with their insurance carrier and health plans. Some payors may not cover the Company’s service as ordered by the prescribing physician under their reimbursement policies. In the absence of contracted reimbursement coverage or the ability to reasonably estimate reimbursement, the Company recognizes revenue only upon the earlier of notification or when payment is received. The Company recognizes revenue related to billings for CMS and commercial payors on an accrual basis, net of contractual adjustments, when a reasonable estimate of reimbursement can be made. These contractual adjustments represent the difference between the list price (the billing rate) and the reimbursement rate for each payor. Upon ultimate collection from CMS and commercial payors, the amount is compared to the previous estimates and the contractual allowance is adjusted accordingly. Until a contract has been negotiated with a commercial payor, the Company’s services may or may not be covered by these entities’ existing reimbursement policies. In addition, patients do not enter into direct agreements with the Company that commit them to pay any portion of the cost of the service in the event that their insurance declines to reimburse the Company. In the absence of an agreement with the patient or other clearly enforceable legal right to demand payment from the patient, the related revenue is recognized only upon the earlier of notification of payment or when payment is received. Revenue recognized when cash or notification of coverage was received was $11.2 million, $3.5 million, and $0.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. Revenue recognized on an accrual basis was $52.9 million, $32.6 million, and $21.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Certain of the Company’s customers pay the Company directly for the ZIO Service upon shipment of devices. Such advance payments are recorded as deferred revenue on the consolidated balance sheets. Cost of Revenue Cost of revenue is expensed as incurred, and includes direct labor, material costs, equipment and infrastructure expenses, internal-use software, allocated overhead, and shipping and handling. Material costs include both the disposable costs of the device and amortization of the PCBAs. Each time the PCBA is used in a ZIO Patch, a portion of the cost of the PCBA is recorded as a cost of revenue. Research and Development The Company’s research and development costs are expensed as incurred. Research and development costs include, but are not limited to, payroll and personnel-related expenses, laboratory supplies, consulting costs and overhead charges. Income Taxes The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Stock-Based Compensation The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant date. Stock options use the Black-Scholes option-pricing model to estimate fair market value. Stock-based compensation expense is recognized over the requisite service period using the straight-line method and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For restricted stock, the compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant, and recognized as compensation expense on a straight-line basis over the requisite service period. The Company recognizes compensation expense related to the Employee Stock Purchase Program (“ESPP”) based on the estimated fair value of the options on the date of grant, net of estimated forfeitures. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model for each purchase period. The grant date fair value is expensed on a straight-line basis over the offering period. Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share for all periods presented, since the effect of potentially dilutive securities are anti-dilutive. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the Company’s results of operations, net loss or cash flows. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”), issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which defers the effective date of ASU 2014-09 by one year allowing early adoption as of the original effective date of fiscal years and interim reporting periods beginning after December 15, 2016, at which time companies may adopt the new standard update under the full retrospective method or the modified retrospective method. The deferral results in the new revenue standard being effective for the Company for fiscal years and interim reporting periods beginning after December 15, 2017. In March, April and May 2016, the FASB issued additional updates to the new revenue standard relating to reporting revenue on a gross versus net basis, identifying performance obligations and licensing arrangements, and narrow-scope improvements and practical expedients, respectively. The Company plans on adopting this standard on January 1, 2018 and has not made the decision as to which adoption method it will utilize. The Company’s final determination will depend on the significance of the impact of the new standard on the Company’s financial results. The Company is in the initial stages of its evaluation of the adoption of the new standard on its accounting policies. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern— Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern The Company adopted this guidance effective December 31, 2016, and there was no impact on the disclosures to its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory, Simplifying the Measurement of Inventory. Under ASU 2015-11, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The Company does not expect that the adoption of the guidance will have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under ASU 2015-17, deferred tax liabilities and assets will be classified as noncurrent on the balance sheet. Previous guidance required deferred tax liabilities and assets to be separated into current and noncurrent amounts on the balance sheet. The guidance is effective for annual periods beginning after December 15, 2016 and for interim periods within those annual periods. Early adoption is permitted. The Company does not expect that the adoption of the guidance will have a material effect on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has not determined the potential effects of this ASU on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize assets and liabilities on its consolidated balance sheet for leases with accounting lease terms of more than 12 months. ASU 2016-02 will replace most existing lease accounting guidance in U.S. GAAP when it becomes effective. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of operations. ASU 2016-02 will be effective for our first quarter of fiscal 2020 and requires the modified retrospective method of adoption. Early adoption is permitted. Although we are currently evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures, we expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718). This ASU was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. This standard covers accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU will be effective for annual periods ending after December 15, 2016 and interim periods beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash, In January 2017, the FASB issued a new accounting standard update to simplify the measurement of goodwill by eliminating the Step 2 impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance required an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new guidance becomes effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, though early adoption is permitted. The Company is currently assessing the impact of this new guidance. |
Cash Equivalents and Investment
Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash Equivalents and Investments | 3. Cash Equivalents and Investments The fair value of securities, not including cash at December 31, 2016 and 2015, were as follows (in thousands): December 31, 2016 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Money market funds $ 45,937 $ — $ — $ 45,937 U.S. government securities 16,479 11 — 16,490 Corporate notes 23,947 — (20 ) 23,927 Commercial paper 24,971 — — 24,971 Total available-for-sale securities $ 111,334 $ 11 $ (20 ) $ 111,325 Classified as: Cash equivalents $ 45,937 Short-term investments 54,407 Long-term investments 10,981 Total cash equivalents and investments $ 111,325 December 31, 2015 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Money market funds $ 1,254 $ — $ — $ 1,254 Total available-for-sale securities $ 1,254 $ — $ — $ 1,254 Classified as: Cash equivalents $ 1,254 Available-for-sale securities held as of December 31, 2016 had a weighted average days to maturity of 150 days. There have been no material realized gains or realized losses on available-for-sale securities for the periods presented. As the carrying value approximates the fair value for the Company’s cash equivalents, short-term and long-term marketable securities shown in the tables above, the following table summarizes the fair value of the Company’s cash equivalents, short-term and long-term marketable securities classified by maturity as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Due within one year $ 100,344 $ 1,254 Due after one year through three years 10,981 — Total available-for-sale marketable debt securities $ 111,325 $ 1,254 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The corporate notes, commercial paper and government bonds are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Based on Level 2 inputs and the borrowing rates currently available to the Company for loans with similar terms and maturities, the carrying value of the Company’s debt approximates its fair value. The following table presents the fair value of the Company’s financial assets and liabilities determined using the inputs defined above (amounts in thousands). December 31, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 45,937 $ — $ — $ 45,937 U.S. government securities — 16,490 — 16,490 Corporate notes — 23,927 — 23,927 Commercial paper — 24,971 — 24,971 Total $ 45,937 $ 65,388 $ — $ 111,325 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money market funds $ 1,254 $ — $ — $ 1,254 Total $ 1,254 $ — $ — $ 1,254 Liabilities Preferred stock warrant liabilities $ — $ — $ 2,949 $ 2,949 Total $ — $ — $ 2,949 $ 2,949 The following table sets forth a summary of the changes in the fair value of the preferred stock warrants which is classified as Level 3 in the fair value hierarchy. There were no transfers into or out of Level 3 during the periods (in thousands): Year Ended December 31, 2016 2015 Beginning balance $ 2,949 $ 2,794 Fair value of preferred stock warrants issued in connection with long-term debt — 44 Exercise of preferred stock warrants (251 ) — Total change in fair value recorded as other expense, net 2,123 111 Reclassification of warrant liability to additional paid-in capital (4,821 ) — Ending balance $ — $ 2,949 The valuation of the preferred stock warrant liabilities is discussed in Note 12. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Inventory and PCBAs Inventory and PCBAs consisted of the following (in thousands): December 31, 2016 2015 Raw materials $ 839 $ 629 Finished goods 3,324 2,147 Total $ 4,163 $ 2,776 December 31, 2016 2015 Reported on the consolidated balance sheet as: Inventory $ 1,390 $ 1,145 Other assets 2,773 1,631 Total $ 4,163 $ 2,776 Amounts reported as other assets are comprised of the PCBA costs that are included in both raw materials and finished goods totals above. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2016 2015 Laboratory and manufacturing equipment $ 1,509 $ 1,130 Computer equipment and software 736 538 Furniture and fixtures 657 114 Leasehold improvements 502 344 Internal-use software 2,900 993 Total property and equipment, gross 6,304 3,119 Less: accumulated depreciation and amortization (1,651 ) (1,083 ) Total property and equipment, net $ 4,653 $ 2,036 Depreciation and amortization expense for the years ended December 31, 2016, 2015 and 2014 was $568,000, $492,000, and $242,000 respectively. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2016 2015 Accrued vacation $ 1,642 $ 1,250 Accrued payroll and related expenses 6,179 3,838 Accrued professional services fees 636 652 Other 1,708 959 Total accrued liabilities $ 10,165 $ 6,699 |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 6 . Related-Party Transactions Kaiser Permanente (“Kaiser”) is a common stock holder of the Company, representing 6.1% ownership of the total outstanding shares of the Company as of December 31, 2016. For the years ended December 31, 2016, 2015, and 2014 the Company recognized revenue of $2.5 million, $1.8 million and $1.4 million, respectively, for transactions with Kaiser. The amounts receivable from transactions with Kaiser were $449,000 and $366,000 as of December 31, 2016 and 2015, respectively. Kaiser additionally performs services related to clinical trials and the Company utilizes Kaiser for employee healthcare. The total expense recorded was $614,000, $597,000 and $193,000 as of December 31, 2016, 2015 and 2014, respectively, and was included in cost of revenues and operating expenses. The amounts outstanding and included in accounts payable and accrued liabilities were $229,000 and $261,000 as of December 31, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Lease Arrangements The Company leases office and manufacturing space under non-cancelable operating leases which expire on various dates through 2020. These leases generally contain scheduled rent increases or escalation clauses and renewal options. The Company recognizes rent expense on a straight-line basis over the lease period. The following table summarizes the Company’s future minimum lease payments as of December 31, 2016 (in thousands): Year Ending December 31: 2017 $ 4,678 2018 4,712 2019 4,721 2020 782 Total $ 14,893 The Company’s rent expense was $3.1 million, $1.6 million and $1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. Legal Proceedings From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that could have a material adverse effect on the financial position, results of operations or cash flows of the Company. Indemnifications In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by California corporate law. The Company currently has directors’ and officers’ insurance. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions, and believes that the estimated fair value of these indemnification obligations is not material and it has not accrued any amounts for these obligations. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Pharmakon Loan Agreement In December 2015, the Company entered into a Loan Agreement with Biopharma Secured Investments III Holdings Cayman LP, or Pharmakon (the “Pharmakon Loan Agreement”). The Pharmakon Loan Agreement provides for up to $55.0 million in term loans split into two tranches as follows: (i) the Tranche A Loans are $30.0 million in term loans, and (ii) the Tranche B Loans are up to $25.0 million in term loans. The Tranche A Loans were drawn on December 4, 2015. The Tranche B Loans were available to be drawn prior to December 4, 2016. No additional draw was made. During the first full eight quarters, payments are interest only and for the first two years 50% of the interest will be “paid in kind.” The Company is subject to a financial covenant related to minimum trailing revenue targets that begins in June 2017, and is tested on a semi-annual basis. The minimum net revenue covenant ranges from $44.7 million for the period ended June 30, 2017 to $102.6 million for the period ended December 31, 2021. The minimum net revenues financial covenant has a 45-day equity cure period following required delivery date of the financial statements. Pursuant to this equity cure provision, the Company may cure a revenue covenant default by raising additional funds from the sale of equity. The loan matures December 2021. The Tranche A Loans bear interest at a fixed rate equal to 9.50% per annum that is due and payable quarterly in arrears. During the first eight calendar quarters, 50% of the interest due and payable is added to the then outstanding principal. The Pharmakon Loan Agreement requires the Company to maintain a minimum consolidated liquidity and minimum net revenue during the term of the loan facility and contains customary affirmative and negative covenants and event of default provisions that could result in the acceleration of the repayment obligations under the loan facility. Upon a change in control of the Company, Pharmakon has the option to demand payment in full of the outstanding loans together with any prepayment premium. The obligations under the Pharmakon Loan Agreement are secured by a security interest in substantially all of the Company’s assets pursuant to the Pharmakon Guaranty and Security Agreement and this security interest is governed by an intercreditor agreement between Pharmakon and Silicon Valley Bank (“SVB”). In December 2015, the Company used the proceeds from the Pharmakon Loan Agreement to repay $4.9 million of bank debt to SVB. The issuance costs and debt discount have been netted against the borrowed funds on the balance sheet. The debt balance, net of debt discount and issuance costs, as of December 31, 2016 and 2015, was $30.8 million and $29.1 million, respectively. Bank Debt Loan and Security Agreement In January 2014, the Company amended its bank debt with SVB by entering into the First Amendment and Default Waiver (“First Amendment”) which amended covenant details. In June 2014, the Company refinanced its debt with SVB by entering into the Second Amendment to the Amended and Restated Loan Security Agreement (“Second Amendment”). Under this amendment the Company borrowed $4.9 million with an additional advance of $5.0 million available. All the borrowings under the Second Amendment were collateralized by all of the Company’s assets, excluding intellectual property. In connection with entering into the Amended Loan Agreement, the Company issued warrants to purchase 20,136 shares of Series D at $7.31 per share that expire June 2024 (See Note 11). In December 2015, the Company used the proceeds from the Pharmakon Loan Agreement to repay $4.9 million of bank debt to SVB and entered into a Second Amended and Restated Loan and Security Agreement with SVB (“SVB Loan Agreement”). Under the SVB Loan Agreement the Company may borrow, repay and reborrow under a revolving credit line, but not in excess of the maximum loan amount of $15.0 million, until December 4, 2018, when all outstanding principal and accrued interest becomes due and payable. Any principal amount outstanding under the SVB revolving credit line will bear interest at a floating rate per annum equal to the rate published by The Wall Street Journal as the “Prime Rate” plus 0.25%. The Company may borrow up to 80% of its eligible accounts receivable, up to the maximum of $15.0 million. In August 2016, the Company obtained a $3.1 million standby letter of credit pursuant to its SVB loan agreement in connection with a new lease for the San Francisco office. As of December 31, 2016 and 2015, the Company was eligible to borrow up to $2.5 million and $2.9 million, respectively, under the SVB revolving credit line. The SVB Loan Agreement requires the Company to maintain a minimum consolidated liquidity and minimum net sales during the term of the loan facility. In addition, the SVB Loan Agreement contains customary affirmative and negative covenants and events of default. The obligations under the SVB Loan Agreement are collaterialized by substantially all assets of the Company and this security interest is governed by an intercreditor agreement between Pharmakon and SVB. California HealthCare Foundation Note In November 2012, the Company entered into a Note Purchase Agreement and Promissory Note with the California HealthCare Foundation (the “CHCF Note”) through which the Company borrowed $1.5 million. The CHCF Note accrues simple interest of 2.0%. The accrued interest and the principal originally matured in November 2016. In partial consideration for the issuance of the CHCF Note, the Company issued warrants to purchase 22,807 shares of the Company’s Series D convertible preferred stock. In June 2015, the Company amended the CHCF Note to extend the maturity date to May 2018. In partial consideration for the amendment, the Company issued 8,552 warrants at $6.58 exercise price per share for shares of the Company’s Series D convertible preferred stock. See Note 12 for further discussion of the warrants. The CHCF note is subordinate to other bank debt. The debt balance, net of debt discount, as of December 31, 2016 and 2015 was $1.5 million and $1.4 million, respectively. Future minimum payments Future minimum payments under the CHCF Note and Pharmakon Loan at December 31, 2016 are as follows (in thousands): Year Ending December 31: 2017 $ 1,549 2018 4,858 2019 3,192 2020 19,169 2021 17,564 46,332 Less: Amount representing interest (13,241 ) Less: Amount representing debt discount and issuance costs (864 ) Present value of minimum payments $ 32,227 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Company operates in the United States for tax reporting purposes. The Company did not record a provision or benefit for income taxes during the years ended December 31, 2016, 2015 and 2014, as it reported losses in each period which are not more likely than not to be realized. Due to the uncertainties surrounding the realization of deferred tax assets through future taxable income, the Company has provided a full valuation allowance and, therefore, no benefit has been recognized for the net operating loss carryforwards and other deferred tax assets. The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the period presented (in thousands): Year Ended December 31, 2016 2015 2014 Tax at statutory federal rate $ (7,107 ) $ (7,752 ) $ (5,365 ) State taxes, net of federal benefit — — 3 Stock-based compensation 255 251 281 Other 916 (128 ) 166 Tax credits (139 ) (178 ) (168 ) Change in valuation allowance 6,075 7,807 5,083 Provision for income taxes $ — $ — $ — The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands): December 31, 2016 2015 2014 Deferred tax assets: Net operating loss carryforwards $ 38,694 $ 34,714 $ 27,318 Tax credit carryforwards 1,587 1,728 1,388 Allowances and other 4,787 2,024 807 Depreciation and amortization (207 ) 99 357 Total deferred tax assets 44,861 38,565 29,870 Valuation allowance (44,861 ) (38,565 ) (29,870 ) Net deferred tax assets $ — $ — $ — Due to the uncertainties surrounding the realization of deferred tax assets through future taxable income, the Company has provided a full valuation allowance and, therefore, no benefit has been recognized for the net operating loss carryforwards and other deferred tax assets. As of December 31, 2016, the Company had approximately $104.6 million of federal and $58.6 million of state net operating loss carryforwards available to offset future taxable income which expires in varying amounts beginning in 2027 and 2017, respectively. As of December 31, 2016, the Company had tax credit carryforwards of approximately $1.3 million, and $1.2 million available to reduce future taxable income, if any, for both federal and state purposes, respectively. The federal tax credit carryforwards expire beginning in 2027 and the state tax credits can be carried forward indefinitely. The Tax Reform Act of 1986, and similar state provisions, limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event the Company should experience an ownership change, as defined, utilization of its net operating loss carryforwards and tax credits could be limited. The Company has not completed a formal 382 study to analyze prior ownership changes. Previous or future ownership changes may limit the utilization of the Company’s net operating losses. A reconciliation of the Company’s unrecognized tax benefit amount is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Balance at beginning of year $ 570 $ 460 $ 364 Additions for tax positions taken in current year 75 110 96 Decreases in balances related to prior year tax position (29 ) — — Balance at end of year $ 616 $ 570 $ 460 The Company does not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. Management determined that no accrual for interest or penalties was required as of December 31, 2016 and 2015. All of the Company’s tax years are open to examination by the U.S. federal and state tax authorities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Common stock The Company’s amended and restated certificate of incorporation dated October 25, 2016, authorized the Company to issue 100,000,000 shares of common stock with a par value of $0.001 per share and 5,000,000 shares of preferred stock with a par value of $0.001 per share. The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the board of directors, subject to the prior rights of holders of all series of convertible preferred stock outstanding. No dividends were declared as of December 31, 2016. The Company had reserved shares of common stock for issuance, on an as-if converted basis, as follows: December 31, 2016 2015 Convertible preferred stock outstanding — 13,343,981 Options issued and outstanding 2,977,218 2,685,913 RSUs issued and unvested 105,529 — Convertible preferred stock warrants — 328,114 Common stock warrants issued 217,245 — Shares available for grant under future stock plans 4,226,068 331,938 7,526,060 16,689,946 |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | 11. Convertible Preferred Stock In connection with the completion of the Company’s IPO in October 2016, the Company’s 11,077,505 outstanding shares of convertible preferred stock were converted into 13,375,333 shares of common stock. The table below provides information on the Company’s convertible preferred stock offerings as of December 31, 2015 (in thousands, except shares and original issue price): Shares Original Issue Price Authorized Issued and Outstanding As-if converted to common Liquidation Amount Proceeds Net of Issuance Costs Series A convertible preferred stock $ 5.67 3,415,649 3,390,963 3,390,963 $ 19,236 $ 19,134 Series B convertible preferred Stock $ 16.39 623,254 610,134 1,222,944 10,000 9,855 Series C convertible preferred stock $ 16.39 1,360,582 1,351,423 3,036,448 33,224 21,953 Series D convertible preferred stock $ 7.31 2,627,595 2,327,897 2,327,897 25,516 16,843 Series E convertible preferred stock $ 8.77 3,365,802 3,365,729 3,365,729 29,519 29,311 Total convertible preferred stock 11,392,882 11,046,146 13,343,981 $ 117,495 $ 97,096 The rights, preferences and privileges of the Series A convertible preferred stock (“Series A”), Series B convertible preferred stock (“Series B”), Series C convertible preferred stock (“Series C”), Series D convertible preferred stock (“Series D”) and Series E convertible preferred stock (“Series E”) are as follows: Voting Each share of Series A, Series B, Series C, Series D and Series E has voting rights equal to an equivalent number of shares of common stock into which it is convertible and vote together as one class with the common stock. The holders of Series A and Series C, each voting as a separate class, are entitled to elect two members of the Company’s board of directors, respectively. The holders of Series D, Series E and common stock, each voting as a separate class, are entitled to elect one member of the Company’s board of directors, respectively. Any additional members of the Company’s board of directors may be elected by holders of common stock and preferred stock, voting together as a single class on an as-if converted to common stock basis. Dividends Holders of Series E are entitled to receive dividends, when, as and if declared and unanimously approved by the board of directors, at the dividend rate of $0.71 per share. No distributions shall be made with respect to the Series A, Series B, Series C, Series D or the common stock unless the Series E dividend has been declared, and all such declared dividends have been paid or set aside for payment to the holders of Series E. After the payment or the setting aside of payment of the Series E dividend, the holders of outstanding shares of Series D shall be entitled to receive dividends, when, as and if declared by the board of directors, with unanimous approval, out of any assets at the time legally available therefore, at the dividend rate of $0.59 per share. After the payment or the setting aside of payment of the Series D dividend the holders of outstanding shares of Series B and Series C shall be entitled to receive dividends, when, as and if declared by the board of directors, with unanimous approval, out of any assets at the time legally available therefore, at the dividend rate of $1.29 and $1.29 per share, respectively. After the payment or the setting aside of payment of the Series B and Series C dividends, the holders of Series A shall be entitled to receive dividends, when, as and if declared by the board of directors, with unanimous approval, out of the assets at the time legally available therefore, at the dividend rate of $0.47 per share. No distributions shall be made with respect to the common stock unless the Series A dividend has been declared in accordance with the preferences stated herein and all such declared dividends have been paid or set aside for payment to the holders of Series A. The right to receive dividends on shares of Series A, Series B, Series C, Series D and Series E is not cumulative, and no rights to dividends shall accrue to holders of Series A, Series B, Series C, Series D and Series E by reasons on the fact that dividends on the shares are not declared or paid. No dividends have been declared through December 31, 2016. Liquidation In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of Series E are entitled to receive, prior and in preference to the holders of Series A, Series B, Series C, Series D and common stock, a per share amount equal to 1.0 times the purchase price plus any declared but unpaid dividends thereon. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of Series E are insufficient to permit the payment to such holders of the full amounts above, then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series E in proportion to what they would otherwise be entitled to receive. After the payment or the setting aside of payment of the full Series E liquidation preference and unpaid dividends, the holders of Series D shall be entitled to receive prior and in preference to the holders of Series C, Series B, Series A and common stock, a per share amount equal to 1.5 times the purchase price plus any declared but unpaid dividends thereon. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of Series D are insufficient to permit the payment to such holders of the full amounts above, then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series E in proportion to what they would otherwise be entitled to receive. After the payment or setting aside of the full Series E and Series D liquidation preference and unpaid dividends the holders of Series C shall be entitled to receive, pari passu with Series B, prior and in preference to the holders of Series A and common stock, a per share amount equal to 1.5 times and 1.0 times their purchase price plus any declared but unpaid dividends thereon, respectively. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of Series C and Series B are insufficient to permit the payment to such holders of the full amounts above, then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series C and Series B in proportion to what they would otherwise be entitled to receive. After the payment or the setting aside of payment of the full Series E, D, B and C liquidation preference and unpaid dividends, Series A stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock, an amount per share for each share of Series A held by them equal to 1.0 times the purchase price plus all declared but unpaid dividends thereon, if any, on such share of Series A. If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the holders of the preferred stock are insufficient to permit the payment to such holders of the full amounts above, then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series A. After the payment or setting aside payment of the full Series E, D, B, C and A liquidation preference and unpaid dividends, the entire remaining assets of the Company legally available for distributions shall be distributed pro rata to holders of common stock. Conversion Each share of preferred stock is convertible, at the option of the holder at any time after the date of issuance of such share, into such number of fully paid and non-assessable shares of common stock determined by dividing the original issue price by the conversion price for such series in effect at the time of conversion. The conversion price for the Series A, Series B, Series C, Series D and Series E is subject to adjustment in accordance with conversion provisions contained in the Company’s certificate of incorporation. The Series A, Series D and Series E convertible preferred stock are convertible into common stock on a one-for-one basis. The Series B and Series C convertible preferred stock are convertible into common stock on a one-for-2.00438849 and one-for-2.24685484 basis, respectively. The conversion price for the preferred stock is subject to anti-dilution provisions. Each share of Series A, Series B, Series C, Series D and Series E is automatically converted into shares of common stock at the conversion price at the time in effect for such share immediately upon the Company’s sale of its common stock in a public offering provided that the offering price is not less than $17.65 per share (as adjusted for recapitalizations, stock combinations, stock dividends, stock splits and the like) and which results in aggregate cash proceeds of not less than $40.0 million before underwriting discounts, commissions, and fees (“Qualified IPO”). The preferred stock will also automatically convert upon the request for such conversion from the holders of at least 63% of the then outstanding shares of preferred stock and holders voting together as a single class on an as-if converted to common stock basis. Classification The Company had classified the convertible preferred stock as mezzanine equity on the consolidated balance sheets as the stock was contingently redeemable. Upon the occurrence of certain change in control events that are outside the Company’s control, including liquidation, sale or transfer of the Company, holders of the convertible preferred stock could cause redemption for cash. The Company had elected not to adjust the carrying value of the convertible preferred stock to the liquidation preferences of such shares because it was uncertain whether or when an event would occur that would obligate the Company to pay the liquidation preferences to the holders of convertible preferred stock. Subsequent adjustments to the carrying values to the liquidation preferences would be made only when it became probable that such a liquidation event would occur. |
Preferred Stock Warrant Liabili
Preferred Stock Warrant Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Preferred Stock Warrant Liabilities [Abstract] | |
Preferred Stock Warrant Liabilities | 12. Preferred Stock Warrant Liabilities In connection with a loan agreement that was entered into in November 2009, the Company issued a warrant to purchase 15,865 shares of Series A Preferred Stock at $5.67 per share that expires in November 2019. The fair value of the warrant was determined using the Black Scholes option pricing model and the following assumptions: volatility of 70%, risk free rate of 2.2%, exercise price of $5.67, and an expected life of ten years. The fair value of the warrant, $68,000, was recorded as a debt issuance cost and amortized over the loan draw down period to interest expense. The Company recorded a charge of $182,000, $38,000, and $28,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. Upon the IPO, the Series A preferred stock warrant converted into a common stock warrant was reclassified to additional paid-in-capital in the Company's balance sheet. The warrant was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 12,491 shares of the Company's common stock. In November 2009, in connection with borrowings under a loan agreement, the Company issued warrants to purchase 8,813 shares of Series A Preferred Stock at $5.67 per share that expire November 2019. The fair value of the warrant was determined using the Black Scholes option pricing model and the following assumptions: volatility of 70%, risk free rate of 2.2%, exercise price of $5.67, and an expected life of ten years. The fair value of the warrant, $38,000, was recorded as a debt discount and amortized over the loan repayment period to interest expense. The Company recorded a charge of $101,000, $22,000, and $15,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. Upon the IPO, the Series A preferred stock warrant converted into a common stock warrant and was reclassified to additional paid-in-capital in the Company's balance sheet. The warrant was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 6,939 shares of the Company's common stock. In May 2010, in connection with borrowings under a loan agreement, the Company issued warrants to purchase 1,525 shares of Series B Preferred Stock at $16.39 per share that expire November 2019. The fair value of the warrant was determined using the Black-Scholes option pricing model and the following assumptions: volatility of 60%, risk free rate of 2.8%, exercise price of $16.39, and expected life of 9.5 years. The fair value of the warrant, $19,000, was recorded as a debt discount and amortized over the loan repayment period to interest expense. The Company recorded a charge of $14,000, $5,000 and $4,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. Upon the IPO, the Series A preferred stock warrants converted into common stock warrants and was reclassified to additional paid-in-capital in the Company's balance sheet. The warrant was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 2,119 shares of the Company's common stock. In February 2011, in connection with borrowings under a loan agreement, the Company issued warrants to purchase 11,592 shares of Series B Preferred Stock at $16.39 per share that expire February 2021. The fair value of the warrant was determined using the Black-Scholes option pricing model and the following assumptions: volatility of 60%, risk free rate of 3.4%, exercise price of $16.39, and expected life of 10 years. The fair value of the warrant, $121,000, was recorded as a debt discount and amortized over the loan repayment period to interest expense. The Company recognized a charge of $104,000, $42,000 and $29,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. Upon the IPO, the Series A preferred stock warrants converted into common stock warrants and was reclassified to additional paid-in-capital in the Company's balance sheet. The warrant was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 16,113 shares of the Company's common stock. In November 2012, in connection with borrowings under a convertible note, the Company issued warrants to purchase shares of Series C or New Preferred. The warrants were only exercisable if the Convertible Notes were converted into Series C or New Preferred. The warrants’ exercise price is $0.01 per share and they have a seven year term. On March 27, 2013 the Company closed the Series D financing. The warrants were converted into warrants to purchase 207,177 shares of Series D convertible preferred stock. The Company recognized a charge of $1,199,000, income of $42,000, and a charge of $178,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. Upon the IPO when the Series A preferred stock warrants converted into common stock warrants and were reclassified to additional paid-in-capital in the Company's balance sheet. As a result, the warrants are no longer subject to fair value remeasurement. In November 2012, in connection with borrowings under the CHCF Note (Note 8), the Company issued warrants to purchase shares of Series C or shares in the next equity financing with proceeds of at least $500,000. The warrants are for the number of shares equal to $150,000 divided by the price of Series C or the next equity financing and expire at the earlier of November 2022 or a liquidation event. To fair value the warrants at the date of issue and at December 31, 2012, the Company assumed Series C shares, which resulted in warrants to purchase 9,152 shares. The fair value of the warrants was determined using the Black-Scholes option pricing model and the following assumptions: volatility of 60%, risk free rate of 1.6%, exercise price of $16.39 and expected life of ten years. The fair value of the warrants, $153,000, was recorded as a debt discount and is being amortized over the loan repayment period to interest expense. On March 27, 2013 the Company closed the Series D financing. The warrants were converted into warrants to purchase 22,807 shares of Series D stock. The Company recognized a charge of $50,000, $14,000, and $24,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. The warrants were exercised on October 3, 2016. In April 2013, in connection with borrowings under a loan agreement, the Company issued warrants to purchase 18,474 shares of Series D Preferred Stock at $7.31 per share that expire April 2023. The fair value of the warrant was determined by using an option pricing model prepared by a third-party based on an allocation of the company’s aggregate value to the outstanding equity instruments, applying a 22% discount to the warrant value for lack of marketability. The fair value of the warrant, $72,000, was recorded as a debt discount and is being amortized over the loan repayment period to interest expense, net. The Company recognized a charge of $217,000, $12,000 and $19,000 related to change in the fair value of the warrants for the year ended December 31, 2016, 2015 and 2014, respectively. The warrants were converted into warrants to purchase common stock upon the completion of the IPO in 2016, and were reclassified to additional paid-in-capital in the Company's balance sheet. The warrant was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 13,414 shares of the Company's common stock. In June 2014, in connection with borrowings under the Second Amendment (Note 8), the Company issued warrants to purchase 20,136 shares of Series D Preferred Stock at $7.31 per share that expire June 2024. The fair value of the warrant was determined by using an option pricing model prepared by a third-party based on an allocation of the Company’s aggregate value to the outstanding equity instruments, applying a 30% discount to the warrant value for lack of marketability. The fair value of the warrant, $98,000, was recorded as a debt discount and is being amortized over the loan repayment period to interest expense. The Company recognized a charge of $237,000, a charge of $14,000, and income of $4,000 related to change in the fair value of the warrants for the years ended December 31, 2016, 2015 and 2014, respectively. The warrants were converted into warrants to purchase common stock upon the completion of the IPO in 2016, and were reclassified to additional paid-in-capital in the Company's balance sheet. The warrant for 10,068 shares was exercised through a cashless exercise on October 26, 2016 resulting in the issuance of a net 7,310 shares of the Company's common stock, and the warrant for 10,068 shares remains outstanding as of December 31, 2016. In June 2015, in connection with the First Amendment of the CHCF Note, the Company issued warrants to purchase 8,552 shares of Series D Preferred Stock at $6.58 per share that expire at the earlier of November 2022 or a liquidation event. The fair value of the warrant was determined by using an option pricing model prepared by a third-party based on an allocation of the Company’s aggregate value to the outstanding equity instruments, applying discount rates of 13-27% to the warrant value for lack of marketability based on the anticipated holding periods to potential liquidity events utilized in the probability-weighted expected return model (“PWERM”). The fair value of the warrant, $44,000, was recorded as debt discount and is being amortized over the loan repayment period to interest expense. The Company recognized a charge of $19,000 and $6,000 related to change in the fair value of the warrants for the years ended December 31, 2016 and, 2015, respectively. The warrants were exercised on October 3, 2016. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plans | 13. Stock Incentive Plans 2006 Plan In October 2006, the Company adopted the 2006 Equity Incentive Plan, as amended, (the “2006 Plan”). The Plan provides for the granting of stock options to employees and non-employees of the Company. Options granted under the Plan may be either incentive stock options or nonqualified stock options. Incentive stock options (“ISO”) may be granted only to employees (including officers and directors who are also employees). Nonqualified stock options (“NSO”) may be granted to employees and non-employees. The board of directors has the authority to determine to whom options will be granted, the number of options, the term and the exercise price. Options under the Plan may be granted for periods of up to ten years and at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% and 85% of the estimated fair value of the shares on the date of grant, respectively, and (ii) the exercise price of an ISO and NSO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. In general, options become exercisable at a rate of 25% after the first anniversary of the grant and then monthly vesting for an additional three years from date of grant. The term for options is no longer than five years for ISOs for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than ten years for all other options. The Company issues new shares upon the exercise of options. 2016 Plan In October 2016, the Company adopted the 2016 Equity Incentive Plan, (the “2016 Plan”). The 2016 Plan was subsequently approved by the Company’s stockholders and became effective on October 19, 2016, immediately before the effective date of the IPO. Following the effectiveness of the 2016 Plan, no additional options will be granted under the 2006 Plan. An aggregate of 3,865,000 additional shares are reserved for issuance under the 2016 Plan. In addition, to the extent that any awards outstanding or subject to vesting restrictions under the 2006 Plan are subsequently forfeited or terminated for any reason before being exercised or settled, the shares of common stock reserved for issuance pursuant to such awards as of the closing of the IPO will become available for issuance under the 2016 Plan. The remaining shares available for grant under the 2006 Plan became available for issuance under the 2016 Plan upon the closing of the IPO. On the first day of each year beginning with 2017, the 2016 Plan authorizes an annual increase of the least of 3,865,000 shares, 5% of outstanding shares on the last day of the immediately preceding fiscal year or an amount as determined by the Company's Board of Directors. As of December 31, 2016, 3,743,037 shares were available for future issuance under the 2016 Plan. Pursuant to the 2016 Plan, stock options, restricted shares, stock units, including restricted stock units and stock appreciation rights may be granted to employees, consultants, and outside directors of the Company. Options granted may be either ISOs or NSOs. Stock options are governed by stock option agreements between the Company and recipients of stock options. ISOs and NSOs may be granted under the 2016 Plan at an exercise price of not less than 100% of the fair market value of the common stock on the date of grant, determined by the Compensation Committee of the Board of Directors. Options become exercisable and expire as determined by the Compensation Committee, provided that the term of ISOs may not exceed ten years from the date of grant. Employee Stock Purchase Program (“ESPP”) In October 2016, the Company’s Board of Directors and stockholders approved the Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, the Company initially reserved 483,031 shares of common stock for issuance as of its effective date of October 19, 2016. On the first day of each calendar year, beginning in 2017, the number of shares in the reserve will increase by the least of 966,062 shares, 1.5% of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year the number of shares of stock as determined by the Company’s Board of Directors. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for twelve-month offering periods which each contain two six-month purchase periods. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the purchase period. As of December 31, 2016, no shares of common stock have been issued to employees participating in the ESPP and 483,031 shares were available for issuance under the ESPP. The Company used the following assumptions to estimate the fair value of the ESPP offered for the year ended December 31, 2016: expected term of .61 – 1.12 years, volatility of 53.21% - 57.69%, risk-free interest rate of 0.52% - 0.68% and expected dividend yield of zero. Option Plan Activity A summary of share-based awards available for grant is as follows: Shares for Grant Balance at December 31, 2013 382,071 Additional options authorized 356,979 Options granted (429,474 ) Options forfeited 38,238 Balance at December 31, 2014 347,814 Additional options authorized 781,954 Options granted (915,080 ) Options forfeited 117,250 Balance at December 31, 2015 331,938 Additional options authorized 3,865,000 Options granted (466,914 ) Options forfeited 13,013 Balance at December 31, 2016 3,743,037 The following table summarizes stock option activity under the 2006 and 2016 Plans, including grants to nonemployees: Options Outstanding Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in Balance at December 31, 2013 1,620,129 $ 3.59 8.20 Options granted 429,474 $ 3.86 Options exercised (38,982 ) $ 1.30 Options forfeited (38,238 ) $ 3.34 Balance at December 31, 2014 1,972,383 $ 3.70 7.86 $ 4,191 Options granted 915,080 $ 3.98 Options exercised (84,300 ) $ 3.71 Options forfeited (117,250 ) $ 3.94 Balance at December 31, 2015 2,685,913 $ 4.81 7.63 $ 11,589 Options granted 361,385 $ 15.65 Options exercised (57,067 ) $ 2.33 Options forfeited (13,013 ) $ 6.92 Balance at December 31, 2016 2,977,218 $ 6.16 6.93 $ 70,979 Options exercisable – December 31, 2016 1,940,798 $ 4.35 6.25 $ 49,775 Options vested and expected to vest – December 31, 2016 2,912,854 $ 6.06 7.06 $ 69,746 The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock. During the years ended December 31, 2016, 2015 and 2014, the Company granted options with a weighted-average grant date fair value of $8.76, $4.08 and $2.20 per share, respectively. The aggregate intrinsic value of options exercised was $654,000, $237,000 and $96,000 for the years ended December 31, 2016, 2015 and 2014, respectively. The total estimated grant date fair value of options vested during the period was $1.8 million, $1.1 million and $869,000, for the years ended December 31, 2016, 2015 and 2014, respectively. The fair value of nonvested restricted stock units (“RSUs”) is based on our closing stock price on the date of grant. A summary for the year ended December 31, 2016, is as follows: Shares Underlying RSUs Weighted Average Grant Date Fair Value Weighted Remaining Vesting Period (in years) Aggregate Intrinsic Value (in Nonvested as of December 31, 2015 — $ — Granted 105,529 27.39 Vested and released — — Forfeited — — Nonvested as of December 31, 2016 105,529 $ 27.39 2.12 $ 3,166 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 14. Stock-Based Compensation Employee Stock-Based Compensation The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the weighted average assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment. Year Ended December 31 2016 2015 2014 Expected term (in years) 6.1 6.1 6.1 Expected volatility 60.0 % 60.0 % 60.0 % Risk-free interest rate 1.42 % 1.76 % 2.08 % Dividend yield 0.0 % 0.0 % 0.0 % Fair Value of Common Stock — Prior to the completion of the Company’s IPO, the fair value of the shares of the Company’s common stock underlying the stock options had historically been determined by the Company’s board of directors. Because there had been no public market for the Company’s common stock, its board of directors determined the fair value of the Company’s common stock at the time of grant of the option by considering a number of objective and subjective factors, including valuations of comparable companies, sales of the Company’s convertible preferred stock, the Company’s operating and financial performance, the lack of liquidity of the Company’s capital stock, and the general and industry-specific economic outlooks. For stock options granted after the completion of the IPO, the Company’s Board of Directors determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported on the date of grant. Expected Term —The expected term represents the period that the share-based awards are expected to be outstanding. As the Company has very limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock-option grants the Company has elected to use the “simplified method” as prescribed by authoritative guidance to compute expected term. Expected Volatility —Since the Company does not have trading history for its common stock, the expected volatility was estimated based on the average volatility for comparable publicly traded companies over a period equal to the expected term of the stock option grants. When selecting comparable publicly traded companies in a similar industry on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Risk-Free Interest Rate —The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to expected term of the option award. Expected Dividend Yield —The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. In addition to the assumptions used in the Black-Scholes option-pricing model, the Company also estimates a forfeiture rate to calculate the stock-based compensation for the Company’s equity awards. The Company will continue to use judgment in evaluating the expected volatility, expected terms and forfeiture rates utilized for the Company’s stock-based compensation calculations on a prospective basis. The following table summarizes the total stock-based compensation expense for options, RSUs and ESPP included in the consolidated statements of operations and comprehensive loss for all periods presented (in thousands): Year Ended December 31 2016 2015 2014 Cost of revenue $ 17 $ 17 $ 15 Research and development 203 165 80 Selling, general and administrative 1,651 1,228 733 Total stock-based compensation expense $ 1,871 $ 1,410 $ 828 As of December 31, 2016, there was total unamortized compensation costs of $5.1 million, net of estimated forfeitures, related to unvested stock options which the Company expects to recognize over a period of approximately 2.9 years, $2.8 million, net of estimated forfeitures, related to unrecognized RSU expense, which the Company expects to recognize over a period of 2.1 years, and $1.9 million unrecognized ESPP expense, which the company will recognize over .92 years. Non-Employee Stock-Based Compensation Stock based compensation expense related to stock options granted to nonemployees is recognized as the stock options are earned. The measurement of stock based compensation for non-employees is subject to periodic adjustment as the underlying equity instruments vest, and the related compensation expense is based on the estimated fair value of the equity instruments using the Black Scholes option pricing model. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services received. Such expense was not material for the years ended December 31, 2016, 2015 and 2014. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 15. Net Loss Per Common Share As the Company had net losses for the years ended December 31, 2016, 2015 and 2014, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of the basic and diluted net loss per share during the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share data): Year Ended December 31, 2016 2015 2014 Numerator: Net loss $ (20,903 ) $ (22,799 ) $ (15,832 ) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 5,285,847 1,376,106 1,314,294 Net loss per common share, basic and diluted $ (3.95 ) $ (16.57 ) $ (12.05 ) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the years ended December 31, 2016, 2015 and 2014, because their inclusion would be anti-dilutive: Year Ended December 31, 2016 2015 Convertible preferred stock on an as-if converted basis — 13,343,981 Options to purchase common stock 2,977,218 2,685,913 RSUs issued and unvested 105,529 — Warrants to purchase convertible preferred stock on an as-if converted basis — 328,114 Warrants to purchase common stock 217,245 — Total 3,299,992 16,358,008 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 16. Selected Quarterly Financial Data (unaudited) The following table presents selected unaudited financial data for each of the eight quarters in the two-year period ended December 31, 2016. The Company believes this information reflects all recurring adjustments necessary to fairly state this information when read in conjunction with the Company's financial statements and the related notes. Net loss per common share, basic and diluted, for the four quarters of each fiscal year may not sum to the total for the fiscal year because of the different number of shares outstanding during each period. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period (in thousands of dollars, except for share and per share data): Quarter Ended March 31 June 30 September 30 December 31 2016: Total revenues $ 12,854 $ 15,734 $ 16,780 $ 18,704 Gross profit 8,195 10,578 11,498 12,918 Net loss (6,126 ) (4,436 ) (4,075 ) (6,266 ) Net loss per common share, basic and diluted $ (4.34 ) $ (3.12 ) $ (2.80 ) $ (0.37 ) 2015: Total revenues $ 7,055 $ 8,887 $ 9,344 $ 10,854 Gross profit 3,882 5,269 5,596 6,693 Net loss (4,392 ) (4,959 ) (5,746 ) (7,702 ) Net loss per common share, basic and diluted $ (3.31 ) $ (3.66 ) $ (4.07 ) $ (5.46 ) |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are consolidated for the year ended December 31, 2016 and include the accounts of iRhythm Technologies, Inc. and its wholly-owned subsidiary, iRhythm Technologies Ltd., established in March 2016. All intercompany accounts and transactions have been eliminated. All accompanying financial statements and disclosures for the years ended December 31, 2015 and December 31, 2014 include only the accounts of iRhythm Te chnologies, Inc. The financial statements of iRhythm Technologies Ltd. use the U.S. dollar as the functional currency |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances for revenue, allowance for doubtful accounts, the useful lives of property and equipment, the recoverability of long-lived assets including the estimated usage of the printed circuit board assemblies (“PCBAs”), the valuation of deferred tax assets, the fair value of the Company’s preferred and common stock and stock-based compensation. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results may differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of certain of the Company’s financial instruments, which includes cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, approximate fair value due to their short maturities. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. |
Investments | Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than 365 days from the date of acquisition. Long-term investments have maturities greater than 365 days as of the balance sheet date. All investments are carried at fair value based upon quoted market prices. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other comprehensive loss. The cost of available-for-sale securities sold is based on the specific-identification method. Realized gains and losses are included in earnings, and are derived for specific-identification method for determining the costs of investments sold. |
Restricted Cash | Restricted Cash Restricted cash consists of certificates of deposit held with a financial institution as security deposits for building leases, and is included in current assets on the Company’s consolidated balance sheets. |
Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowance | Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowance Accounts receivable consists of amounts due to the Company from institutions, government payors and commercial insurance payors as a result of the Company’s normal business activities. Accounts receivable is reported on the balance sheet net of an estimated allowance for doubtful accounts and contractual allowance. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical collections, review of specific outstanding claims, consideration of relevant qualitative factors and an established allowance percentage by aging category. The Company writes off amounts against the allowance for doubtful accounts when they are deemed to be uncollectible. Increases and decreases in the allowance for doubtful accounts are included as a component of selling, general and administrative expenses. The Company establishes a contractual allowance, which is a reduction in revenue, for estimated uncollectible amounts from Centers for Medicare & Medicaid Services (“CMS”), and contracted third-party commercial payors. The following table presents the changes in the allowance for doubtful accounts: December 31, December 2016 2015 Balance, beginning of year $ 1,125 $ 470 Add: provision for doubtful accounts 1,960 1,177 Less: write-offs, net of recoveries and other adjustments (1,293 ) (522 ) Balance, end of year $ 1,792 $ 1,125 The following table presents the changes in the contractual allowance: December 31, December 31, 2016 2015 Balance, beginning of year $ 338 $ 91 Add: contractual allowances 2,726 380 Less: write-offs, net of recoveries and other adjustments (724 ) (133 ) Balance, end of year $ 2,340 $ 338 Management reviews and updates its estimates for the allowance for doubtful accounts and the contractual allowance periodically to reflect its experience regarding historical collections. If management were to make different judgments or utilize different estimates in the allowance for doubtful accounts and the contractual allowance, differences in the amount of reported selling, general and administrative expenses and revenue could result, respectively. |
Concentration of Credit Risk | Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents and investments are deposited with one financial institution in the United States of America. At times, such deposits may be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, United States Government securities, corporate notes, commercial paper and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. The Company has not experienced any material losses on its deposits of cash and cash equivalents or investments. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base and their dispersion across many geographies. The Company does not require collateral. The Company records an allowance for doubtful accounts when it becomes probable that a receivable will not be collected. Government agencies, including CMS and the Veterans Administration, accounted for 40%, 41% and 30% of the Company’s revenue for the years ended December 31, 2016, 2015 and 2014, respectively. Accounts receivable related to federal government agencies accounted for 27% and 30% at December 31, 2016 and 2015, respectively. |
Concentration of Supply Risk | Supply Risk The Company relies on single suppliers for the supply of its reusable printed circuit board assemblies, disposable housings, instruments and other materials used to manufacture the ZIO Patch and the adhesive that binds the ZIO Patch to a patient’s body. These components and materials are critical, and there would be a considerable delay in finding alternative sources of supply. |
Inventory | Inventory Inventory is stated at the lower of cost or market, cost being determined on a standard cost basis for material costs and on actual cost basis for labor and overhead, which approximates actual cost on a first in, first out (“FIFO”) basis, and market being determined as the lower of replacement cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. |
Internal-Use Software | Internal-Use Software The Company capitalizes costs related to internal-use software during the application development stage. Costs related to planning and post implementation activities are expensed as incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life, which is up to five years. The Company evaluates the useful lives of these assets on an annual basis, and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized internal-use software costs are classified as a component of property and equipment. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the fair value of tangible and identifiable intangible net assets acquired in business combinations. Goodwill is tested for impairment on an annual basis and at any other time if events occur or circumstances indicate that the carrying amount of goodwill may not be recoverable. Such events or circumstances may include significant adverse changes in the general business climate, among other things. The impairment test is performed by determining the enterprise fair value of the Company, which is primarily based on the Company’s public market capitalization. If the Company’s carrying value, as a one reporting unit entity, is less than its fair value, then the fair value is allocated to all of its assets and liabilities (including any unrecognized intangible assets) as if the fair value was the purchase price to acquire the Company. The excess of the fair value over the amounts assigned to the Company’s assets and liabilities is the implied fair value of the goodwill. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. The Company did not record any charges related to goodwill impairment in any of the periods presented in these consolidated financial statements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company annually reviews long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. To date, there have been no such impairments of long-lived assets. |
Other Assets | Other Assets Included in the other assets are printed circuit board assemblies, or PCBAs, totaling $2.8 million and $1.6 million as of December 31, 2016 and 2015, respectively. The Company uses a PCBA in each wearable device and it is used numerous times. Each time the PCBA is used in a wearable device, a portion of the cost of the PCBA is recorded as a cost of revenue. The Company has based its estimates of how many times a PCBA can be used on testing in research and development, loss rates, product obsolescence, and the amount of time it takes the device to go through the manufacturing, shipping, customer shelf and patient wear time and upload process. The Company periodically evaluates the use estimate. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, which consisted primarily of legal, accounting, printer and filing fees related to the IPO, were capitalized. As of December 31, 2015, the Company capitalized $0.3 million of deferred offering costs in other long-term assets on the balance sheet. Deferred offering costs of $3.7 million were offset against IPO proceeds upon the completion of the offering in October 2016. |
Preferred Stock Warrant Liabilities | Preferred Stock Warrant Liabilities The Company measured freestanding warrants to purchase shares of its convertible preferred stock at fair value, and recorded the related amounts as liabilities, because the shares underlying the warrants could obligate the Company to transfer assets to the holders at a future date under certain circumstances such as a deemed liquidation event. The fair value of the preferred stock warrants was remeasured at each balance sheet date, and any change in fair value was included in earnings. Such charges were included in other expense, net in the consolidated statements of operations and comprehensive loss. In connection with the Company’s IPO, the Company remeasured the liability at the time of the IPO, and then reclassified the redeemable convertible preferred stock warrant liability to additional paid-in capital, as these warrants converted to common stock warrants. As of December 31, 2016, there were no convertible preferred stock warrants outstanding, and 217,245 common stock warrants were outstanding. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss represents all changes in stockholders’ equity (deficit) except those resulting from and distributions to stockholders. The Company’s unrealized gains and losses on available-for-sale securities represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive loss. |
Revenue Recognition | Revenue Recognition The Company’s devices, cardiac rhythm monitors, have a wear period for up to 14 days for the ZIO Patch or 30 days for the ZIO Event Card. The Company’s services, consisting of the delivery of reports containing analysis of data captured by the physical device to the prescribing physician, are generally billable at the start of the wear period or when reports are issued to physicians, depending on the service provided. For the ZIO Event Card, the Company recognizes revenue on a straight-line basis over the applicable wear period, as the event monitoring results are delivered to physicians. For the ZIO Service, the Company recognizes the revenue at the time that a report is delivered to a physician. For all services performed, the Company considers whether or not the following revenue recognition criteria are met: persuasive evidence of an arrangement exists and delivery has occurred or services have been rendered. For services performed for customers the Company invoices directly, additional revenue recognition criteria include that the price is fixed and determinable and collectability is reasonably assured; for customers in which the Company submits claims to third-party commercial and governmental payors for reimbursement, the Company recognizes revenue only when a reasonable estimate of reimbursement can be made. The assessment of whether a reasonable estimate of reimbursement can be made requires significant judgment by management. Where management’s judgment indicates a reasonable estimate of reimbursement can be made, revenue is recognized upon delivery of the patient report for the ZIO Service and straight-line for the ZIO Event Card. To date, the Company has not been able to estimate revenue for third-party payors for which it does not have a contracted rate, and therefore, revenue has been recognized on the earlier of notice or cash receipt. Some patients have out-of-pocket costs for amounts not covered by their insurance carrier, and the Company may bill the patient directly for these amounts in the form of co-payments and co-insurance in accordance with their insurance carrier and health plans. Some payors may not cover the Company’s service as ordered by the prescribing physician under their reimbursement policies. In the absence of contracted reimbursement coverage or the ability to reasonably estimate reimbursement, the Company recognizes revenue only upon the earlier of notification or when payment is received. The Company recognizes revenue related to billings for CMS and commercial payors on an accrual basis, net of contractual adjustments, when a reasonable estimate of reimbursement can be made. These contractual adjustments represent the difference between the list price (the billing rate) and the reimbursement rate for each payor. Upon ultimate collection from CMS and commercial payors, the amount is compared to the previous estimates and the contractual allowance is adjusted accordingly. Until a contract has been negotiated with a commercial payor, the Company’s services may or may not be covered by these entities’ existing reimbursement policies. In addition, patients do not enter into direct agreements with the Company that commit them to pay any portion of the cost of the service in the event that their insurance declines to reimburse the Company. In the absence of an agreement with the patient or other clearly enforceable legal right to demand payment from the patient, the related revenue is recognized only upon the earlier of notification of payment or when payment is received. Revenue recognized when cash or notification of coverage was received was $11.2 million, $3.5 million, and $0.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. Revenue recognized on an accrual basis was $52.9 million, $32.6 million, and $21.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Certain of the Company’s customers pay the Company directly for the ZIO Service upon shipment of devices. Such advance payments are recorded as deferred revenue on the consolidated balance sheets. |
Cost of Revenue | Cost of Revenue Cost of revenue is expensed as incurred, and includes direct labor, material costs, equipment and infrastructure expenses, internal-use software, allocated overhead, and shipping and handling. Material costs include both the disposable costs of the device and amortization of the PCBAs. Each time the PCBA is used in a ZIO Patch, a portion of the cost of the PCBA is recorded as a cost of revenue. |
Research and Development | Research and Development The Company’s research and development costs are expensed as incurred. Research and development costs include, but are not limited to, payroll and personnel-related expenses, laboratory supplies, consulting costs and overhead charges. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Stock-Based Compensation | Stock-Based Compensation The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant date. Stock options use the Black-Scholes option-pricing model to estimate fair market value. Stock-based compensation expense is recognized over the requisite service period using the straight-line method and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For restricted stock, the compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant, and recognized as compensation expense on a straight-line basis over the requisite service period. The Company recognizes compensation expense related to the Employee Stock Purchase Program (“ESPP”) based on the estimated fair value of the options on the date of grant, net of estimated forfeitures. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model for each purchase period. The grant date fair value is expensed on a straight-line basis over the offering period. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share for all periods presented, since the effect of potentially dilutive securities are anti-dilutive. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the Company’s results of operations, net loss or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”), issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which defers the effective date of ASU 2014-09 by one year allowing early adoption as of the original effective date of fiscal years and interim reporting periods beginning after December 15, 2016, at which time companies may adopt the new standard update under the full retrospective method or the modified retrospective method. The deferral results in the new revenue standard being effective for the Company for fiscal years and interim reporting periods beginning after December 15, 2017. In March, April and May 2016, the FASB issued additional updates to the new revenue standard relating to reporting revenue on a gross versus net basis, identifying performance obligations and licensing arrangements, and narrow-scope improvements and practical expedients, respectively. The Company plans on adopting this standard on January 1, 2018 and has not made the decision as to which adoption method it will utilize. The Company’s final determination will depend on the significance of the impact of the new standard on the Company’s financial results. The Company is in the initial stages of its evaluation of the adoption of the new standard on its accounting policies. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern— Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern The Company adopted this guidance effective December 31, 2016, and there was no impact on the disclosures to its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory, Simplifying the Measurement of Inventory. Under ASU 2015-11, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The Company does not expect that the adoption of the guidance will have a material effect on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under ASU 2015-17, deferred tax liabilities and assets will be classified as noncurrent on the balance sheet. Previous guidance required deferred tax liabilities and assets to be separated into current and noncurrent amounts on the balance sheet. The guidance is effective for annual periods beginning after December 15, 2016 and for interim periods within those annual periods. Early adoption is permitted. The Company does not expect that the adoption of the guidance will have a material effect on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has not determined the potential effects of this ASU on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize assets and liabilities on its consolidated balance sheet for leases with accounting lease terms of more than 12 months. ASU 2016-02 will replace most existing lease accounting guidance in U.S. GAAP when it becomes effective. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of operations. ASU 2016-02 will be effective for our first quarter of fiscal 2020 and requires the modified retrospective method of adoption. Early adoption is permitted. Although we are currently evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures, we expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718). This ASU was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. This standard covers accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU will be effective for annual periods ending after December 15, 2016 and interim periods beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash, In January 2017, the FASB issued a new accounting standard update to simplify the measurement of goodwill by eliminating the Step 2 impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance required an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The new guidance becomes effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, though early adoption is permitted. The Company is currently assessing the impact of this new guidance. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Allowance for Doubtful Accounts | The following table presents the changes in the allowance for doubtful accounts: December 31, December 2016 2015 Balance, beginning of year $ 1,125 $ 470 Add: provision for doubtful accounts 1,960 1,177 Less: write-offs, net of recoveries and other adjustments (1,293 ) (522 ) Balance, end of year $ 1,792 $ 1,125 |
Schedule of Changes in Contractual Allowance | The following table presents the changes in the contractual allowance: December 31, December 31, 2016 2015 Balance, beginning of year $ 338 $ 91 Add: contractual allowances 2,726 380 Less: write-offs, net of recoveries and other adjustments (724 ) (133 ) Balance, end of year $ 2,340 $ 338 |
Cash Equivalents and Investme27
Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Fair Value of Securities, not Including Cash | The fair value of securities, not including cash at December 31, 2016 and 2015, were as follows (in thousands): December 31, 2016 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Money market funds $ 45,937 $ — $ — $ 45,937 U.S. government securities 16,479 11 — 16,490 Corporate notes 23,947 — (20 ) 23,927 Commercial paper 24,971 — — 24,971 Total available-for-sale securities $ 111,334 $ 11 $ (20 ) $ 111,325 Classified as: Cash equivalents $ 45,937 Short-term investments 54,407 Long-term investments 10,981 Total cash equivalents and investments $ 111,325 December 31, 2015 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Money market funds $ 1,254 $ — $ — $ 1,254 Total available-for-sale securities $ 1,254 $ — $ — $ 1,254 Classified as: Cash equivalents $ 1,254 |
Schedule of Fair Value of Short-term and Long-term Marketable Securities Classified by Maturity | As the carrying value approximates the fair value for the Company’s cash equivalents, short-term and long-term marketable securities shown in the tables above, the following table summarizes the fair value of the Company’s cash equivalents, short-term and long-term marketable securities classified by maturity as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Due within one year $ 100,344 $ 1,254 Due after one year through three years 10,981 — Total available-for-sale marketable debt securities $ 111,325 $ 1,254 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Company's Financial Assets and Liabilities | The following table presents the fair value of the Company’s financial assets and liabilities determined using the inputs defined above (amounts in thousands). December 31, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 45,937 $ — $ — $ 45,937 U.S. government securities — 16,490 — 16,490 Corporate notes — 23,927 — 23,927 Commercial paper — 24,971 — 24,971 Total $ 45,937 $ 65,388 $ — $ 111,325 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money market funds $ 1,254 $ — $ — $ 1,254 Total $ 1,254 $ — $ — $ 1,254 Liabilities Preferred stock warrant liabilities $ — $ — $ 2,949 $ 2,949 Total $ — $ — $ 2,949 $ 2,949 |
Summary of Changes in Fair Value of Preferred Stock Warrants Classified as Level 3 | The following table sets forth a summary of the changes in the fair value of the preferred stock warrants which is classified as Level 3 in the fair value hierarchy. Year Ended December 31, 2016 2015 Beginning balance $ 2,949 $ 2,794 Fair value of preferred stock warrants issued in connection with long-term debt — 44 Exercise of preferred stock warrants (251 ) — Total change in fair value recorded as other expense, net 2,123 111 Reclassification of warrant liability to additional paid-in capital (4,821 ) — Ending balance $ — $ 2,949 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Components of Inventory and PCBAs | Inventory and PCBAs consisted of the following (in thousands): December 31, 2016 2015 Raw materials $ 839 $ 629 Finished goods 3,324 2,147 Total $ 4,163 $ 2,776 December 31, 2016 2015 Reported on the consolidated balance sheet as: Inventory $ 1,390 $ 1,145 Other assets 2,773 1,631 Total $ 4,163 $ 2,776 |
Components of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2016 2015 Laboratory and manufacturing equipment $ 1,509 $ 1,130 Computer equipment and software 736 538 Furniture and fixtures 657 114 Leasehold improvements 502 344 Internal-use software 2,900 993 Total property and equipment, gross 6,304 3,119 Less: accumulated depreciation and amortization (1,651 ) (1,083 ) Total property and equipment, net $ 4,653 $ 2,036 |
Components of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2016 2015 Accrued vacation $ 1,642 $ 1,250 Accrued payroll and related expenses 6,179 3,838 Accrued professional services fees 636 652 Other 1,708 959 Total accrued liabilities $ 10,165 $ 6,699 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | The following table summarizes the Company’s future minimum lease payments as of December 31, 2016 (in thousands): Year Ending December 31: 2017 $ 4,678 2018 4,712 2019 4,721 2020 782 Total $ 14,893 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Payments under CHCF Note and Pharmakon Loan | Future minimum payments under the CHCF Note and Pharmakon Loan at December 31, 2016 are as follows (in thousands): Year Ending December 31: 2017 $ 1,549 2018 4,858 2019 3,192 2020 19,169 2021 17,564 46,332 Less: Amount representing interest (13,241 ) Less: Amount representing debt discount and issuance costs (864 ) Present value of minimum payments $ 32,227 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense | The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the period presented (in thousands): Year Ended December 31, 2016 2015 2014 Tax at statutory federal rate $ (7,107 ) $ (7,752 ) $ (5,365 ) State taxes, net of federal benefit — — 3 Stock-based compensation 255 251 281 Other 916 (128 ) 166 Tax credits (139 ) (178 ) (168 ) Change in valuation allowance 6,075 7,807 5,083 Provision for income taxes $ — $ — $ — |
Tax Effects of Temporary Differences and Carryforwards of Deferred Tax Assets | The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands): December 31, 2016 2015 2014 Deferred tax assets: Net operating loss carryforwards $ 38,694 $ 34,714 $ 27,318 Tax credit carryforwards 1,587 1,728 1,388 Allowances and other 4,787 2,024 807 Depreciation and amortization (207 ) 99 357 Total deferred tax assets 44,861 38,565 29,870 Valuation allowance (44,861 ) (38,565 ) (29,870 ) Net deferred tax assets $ — $ — $ — |
Reconciliation of Unrecognized Tax Benefit | A reconciliation of the Company’s unrecognized tax benefit amount is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Balance at beginning of year $ 570 $ 460 $ 364 Additions for tax positions taken in current year 75 110 96 Decreases in balances related to prior year tax position (29 ) — — Balance at end of year $ 616 $ 570 $ 460 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule Of Common Stock Shares Reserved For Future Issuance | The Company had reserved shares of common stock for issuance, on an as-if converted basis, as follows: December 31, 2016 2015 Convertible preferred stock outstanding — 13,343,981 Options issued and outstanding 2,977,218 2,685,913 RSUs issued and unvested 105,529 — Convertible preferred stock warrants — 328,114 Common stock warrants issued 217,245 — Shares available for grant under future stock plans 4,226,068 331,938 7,526,060 16,689,946 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Summary of Convertible Preferred Stock Offerings | The table below provides information on the Company’s convertible preferred stock offerings as of December 31, 2015 (in thousands, except shares and original issue price): Shares Original Issue Price Authorized Issued and Outstanding As-if converted to common Liquidation Amount Proceeds Net of Issuance Costs Series A convertible preferred stock $ 5.67 3,415,649 3,390,963 3,390,963 $ 19,236 $ 19,134 Series B convertible preferred Stock $ 16.39 623,254 610,134 1,222,944 10,000 9,855 Series C convertible preferred stock $ 16.39 1,360,582 1,351,423 3,036,448 33,224 21,953 Series D convertible preferred stock $ 7.31 2,627,595 2,327,897 2,327,897 25,516 16,843 Series E convertible preferred stock $ 8.77 3,365,802 3,365,729 3,365,729 29,519 29,311 Total convertible preferred stock 11,392,882 11,046,146 13,343,981 $ 117,495 $ 97,096 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Share-based Awards Available for Grant | A summary of share-based awards available for grant is as follows: Shares for Grant Balance at December 31, 2013 382,071 Additional options authorized 356,979 Options granted (429,474 ) Options forfeited 38,238 Balance at December 31, 2014 347,814 Additional options authorized 781,954 Options granted (915,080 ) Options forfeited 117,250 Balance at December 31, 2015 331,938 Additional options authorized 3,865,000 Options granted (466,914 ) Options forfeited 13,013 Balance at December 31, 2016 3,743,037 |
Summary of Stock Option Activity Under 2006 and 2016 Plans, Including Grants To Nonemployees | The following table summarizes stock option activity under the 2006 and 2016 Plans, including grants to nonemployees: Options Outstanding Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in Balance at December 31, 2013 1,620,129 $ 3.59 8.20 Options granted 429,474 $ 3.86 Options exercised (38,982 ) $ 1.30 Options forfeited (38,238 ) $ 3.34 Balance at December 31, 2014 1,972,383 $ 3.70 7.86 $ 4,191 Options granted 915,080 $ 3.98 Options exercised (84,300 ) $ 3.71 Options forfeited (117,250 ) $ 3.94 Balance at December 31, 2015 2,685,913 $ 4.81 7.63 $ 11,589 Options granted 361,385 $ 15.65 Options exercised (57,067 ) $ 2.33 Options forfeited (13,013 ) $ 6.92 Balance at December 31, 2016 2,977,218 $ 6.16 6.93 $ 70,979 Options exercisable – December 31, 2016 1,940,798 $ 4.35 6.25 $ 49,775 Options vested and expected to vest – December 31, 2016 2,912,854 $ 6.06 7.06 $ 69,746 |
Summary of Nonvested Restricted Stock Units ("RSUs") | The fair value of nonvested restricted stock units (“RSUs”) is based on our closing stock price on the date of grant. A summary for the year ended December 31, 2016, is as follows: Shares Underlying RSUs Weighted Average Grant Date Fair Value Weighted Remaining Vesting Period (in years) Aggregate Intrinsic Value (in Nonvested as of December 31, 2015 — $ — Granted 105,529 27.39 Vested and released — — Forfeited — — Nonvested as of December 31, 2016 105,529 $ 27.39 2.12 $ 3,166 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Fair Value of Employee Stock Options Estimated Using Weighted Average Assumptions | The fair value of employee stock options was estimated using the weighted average assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment. Year Ended December 31 2016 2015 2014 Expected term (in years) 6.1 6.1 6.1 Expected volatility 60.0 % 60.0 % 60.0 % Risk-free interest rate 1.42 % 1.76 % 2.08 % Dividend yield 0.0 % 0.0 % 0.0 % |
Summary of Total Stock-Based Compensation Expense for Options, RSUs and ESPP Included in Consolidated Statements of Operations and Comprehensive Loss | The following table summarizes the total stock-based compensation expense for options, RSUs and ESPP included in the consolidated statements of operations and comprehensive loss for all periods presented (in thousands): Year Ended December 31 2016 2015 2014 Cost of revenue $ 17 $ 17 $ 15 Research and development 203 165 80 Selling, general and administrative 1,651 1,228 733 Total stock-based compensation expense $ 1,871 $ 1,410 $ 828 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss per Share | The following table sets forth the computation of the basic and diluted net loss per share during the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share data): Year Ended December 31, 2016 2015 2014 Numerator: Net loss $ (20,903 ) $ (22,799 ) $ (15,832 ) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 5,285,847 1,376,106 1,314,294 Net loss per common share, basic and diluted $ (3.95 ) $ (16.57 ) $ (12.05 ) |
Schedule of Anti-dilutive Securities Excluded from Diluted Net Loss per Common Share | The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the years ended December 31, 2016, 2015 and 2014, because their inclusion would be anti-dilutive: Year Ended December 31, 2016 2015 Convertible preferred stock on an as-if converted basis — 13,343,981 Options to purchase common stock 2,977,218 2,685,913 RSUs issued and unvested 105,529 — Warrants to purchase convertible preferred stock on an as-if converted basis — 328,114 Warrants to purchase common stock 217,245 — Total 3,299,992 16,358,008 |
Selected Quarterly Financial 38
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table presents selected unaudited financial data for each of the eight quarters in the two-year period ended December 31, 2016. The Company believes this information reflects all recurring adjustments necessary to fairly state this information when read in conjunction with the Company's financial statements and the related notes. Net loss per common share, basic and diluted, for the four quarters of each fiscal year may not sum to the total for the fiscal year because of the different number of shares outstanding during each period. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period (in thousands of dollars, except for share and per share data): Quarter Ended March 31 June 30 September 30 December 31 2016: Total revenues $ 12,854 $ 15,734 $ 16,780 $ 18,704 Gross profit 8,195 10,578 11,498 12,918 Net loss (6,126 ) (4,436 ) (4,075 ) (6,266 ) Net loss per common share, basic and diluted $ (4.34 ) $ (3.12 ) $ (2.80 ) $ (0.37 ) 2015: Total revenues $ 7,055 $ 8,887 $ 9,344 $ 10,854 Gross profit 3,882 5,269 5,596 6,693 Net loss (4,392 ) (4,959 ) (5,746 ) (7,702 ) Net loss per common share, basic and diluted $ (3.31 ) $ (3.66 ) $ (4.07 ) $ (5.46 ) |
Organization and Description 39
Organization and Description of Business - Additional Information (Details) $ in Thousands | Oct. 31, 2016USD ($)shares | Oct. 19, 2016USD ($)shares | Oct. 05, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2015shares |
Class Of Stock [Line Items] | |||||
Reverse stock split description | On October 4, 2016, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of the Company’s issued and outstanding common stock at a 1-for- 5.882698 ratio, which was effected on October 5, 2016. | ||||
Common stock, reverse stock split ratio | 5.882698 | ||||
Proceeds from stock issuance, net of underwriting discounts and commissions | $ 114,436 | ||||
Number of shares converted into common stock | shares | 13,343,981 | ||||
Carrying value of convertible preferred stock converted into common stock | $ 97,553 | ||||
Initial Public Offering | |||||
Class Of Stock [Line Items] | |||||
Common stock issued | shares | 7,238,235 | ||||
Initial public offering closing date | Oct. 25, 2016 | ||||
Proceeds from stock issuance, net of underwriting discounts and commissions | $ 110,700 | ||||
Underwriting discounts and commissions | 8,600 | ||||
Other expenses | $ 3,700 | ||||
Initial Public Offering | Redeemable Convertible Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Number of shares converted into common stock | shares | 13,375,333 | ||||
Carrying value of convertible preferred stock converted into common stock | $ 97,600 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Schedule of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Balance, beginning of year | $ 1,125 | $ 470 |
Add: provision for doubtful accounts | 1,960 | 1,177 |
Less: write-offs, net of recoveries and other adjustments | (1,293) | (522) |
Balance, end of year | $ 1,792 | $ 1,125 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Schedule of Changes in Contractual Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Balance, beginning of year | $ 338 | $ 91 |
Add: contractual allowances | 2,726 | 380 |
Less: write-offs, net of recoveries and other adjustments | (724) | (133) |
Balance, end of year | $ 2,340 | $ 338 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Impairment long-lived assets | $ 0 | |||
Deferred offering costs | $ 300,000 | $ 3,700,000 | ||
Income tax position likely of being realized upon ultimate settlement | greater than 50% | |||
Unrecognized tax benefits, income tax interest or penalties charge | $ 0 | |||
ZIO Event Card | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equipment wear period | 30 days | |||
Convertible Preferred Stock | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Warrants outstanding | 0 | |||
Common Stock | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Warrants outstanding | 217,245 | |||
Internal-Use Software | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful life | 5 years | |||
Printed Circuit Board Assemblies | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Total other assets | $ 2,800,000 | $ 1,600,000 | ||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful life | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful life | 5 years | |||
Maximum | ZIO Patch | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equipment wear period | 14 days | |||
Revenue | Customer Concentration Risk | Government Agencies | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk | 40.00% | 41.00% | 30.00% | |
Accounts Receivable | Accounts Receivable Concentration Risk | Federal Government Agencies | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk | 27.00% | 30.00% | ||
Revenue Recognized When Cash Received | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue recognized | $ 11,200,000 | $ 3,500,000 | $ 600,000 | |
Revenue Recognized on Accrual Basis | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue recognized | $ 52,900,000 | $ 32,600,000 | $ 21,200,000 |
Cash Equivalents and Investme43
Cash Equivalents and Investments - Schedule of Fair Value of Securities, not Including Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash And Cash Equivalents [Line Items] | ||
Amortized Cost | $ 111,334 | $ 1,254 |
Gross Unrealized Gains | 11 | |
Gross Unrealized Losses | (20) | |
Estimated Fair Value | 111,325 | 1,254 |
Cash equivalents | 45,937 | 1,254 |
Short-term investments | 54,407 | |
Long-term investments | 10,981 | |
Total cash equivalents and investments | 111,325 | |
Money Market Funds | ||
Cash And Cash Equivalents [Line Items] | ||
Amortized Cost | 45,937 | 1,254 |
Estimated Fair Value | 45,937 | $ 1,254 |
U.S. Government Securities | ||
Cash And Cash Equivalents [Line Items] | ||
Amortized Cost | 16,479 | |
Gross Unrealized Gains | 11 | |
Estimated Fair Value | 16,490 | |
Commercial Paper | ||
Cash And Cash Equivalents [Line Items] | ||
Amortized Cost | 24,971 | |
Estimated Fair Value | 24,971 | |
Corporate Notes | ||
Cash And Cash Equivalents [Line Items] | ||
Amortized Cost | 23,947 | |
Gross Unrealized Losses | (20) | |
Estimated Fair Value | $ 23,927 |
Cash Equivalents and Investme44
Cash Equivalents and Investments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Available-for-sale securities, weighted average days to maturity | 150 days |
Cash Equivalents and Investme45
Cash Equivalents and Investments - Schedule of Fair Value of Short-term and Long-term Marketable Securities Classified by Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Marketable Securities [Abstract] | ||
Due within one year | $ 100,344 | $ 1,254 |
Due after one year through three years | 10,981 | |
Total available-for-sale marketable debt securities | $ 111,325 | $ 1,254 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Company's Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Total financial assets | $ 111,325 | $ 1,254 |
Liabilities | ||
Total financial liabilities | 2,949 | |
Preferred Stock Warrant Liabilities | ||
Liabilities | ||
Total financial liabilities | 2,949 | |
Money Market Funds | ||
Assets | ||
Total financial assets | 45,937 | 1,254 |
U.S. Government Securities | ||
Assets | ||
Total financial assets | 16,490 | |
Corporate Notes | ||
Assets | ||
Total financial assets | 23,927 | |
Commercial Paper | ||
Assets | ||
Total financial assets | 24,971 | |
Level 1 | ||
Assets | ||
Total financial assets | 45,937 | 1,254 |
Level 1 | Money Market Funds | ||
Assets | ||
Total financial assets | 45,937 | 1,254 |
Level 2 | ||
Assets | ||
Total financial assets | 65,388 | |
Level 2 | U.S. Government Securities | ||
Assets | ||
Total financial assets | 16,490 | |
Level 2 | Corporate Notes | ||
Assets | ||
Total financial assets | 23,927 | |
Level 2 | Commercial Paper | ||
Assets | ||
Total financial assets | $ 24,971 | |
Level 3 | ||
Liabilities | ||
Total financial liabilities | 2,949 | |
Level 3 | Preferred Stock Warrant Liabilities | ||
Liabilities | ||
Total financial liabilities | $ 2,949 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Fair value measurement, liability transfers into level 3, amount | $ 0 |
Fair value measurement, liability transfers out of level 3, amount | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in Fair Value of Preferred Stock Warrants Classified as Level 3 (Details) - Level 3 - Preferred Stock Warrant Liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Beginning balance | $ 2,949 | $ 2,794 |
Fair value of preferred stock warrants issued in connection with long-term debt | 44 | |
Exercise of preferred stock warrants | (251) | |
Total change in fair value recorded as other expense, net | 2,123 | 111 |
Reclassification of warrant liability to additional paid-in capital | $ (4,821) | |
Ending balance | $ 2,949 |
Balance Sheet Components - Comp
Balance Sheet Components - Components of Inventory and PCBAs (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Total inventory and printed circuit board assemblies | $ 4,163 | $ 2,776 |
Inventory | 1,390 | 1,145 |
Other assets | 3,052 | 2,145 |
PCBA | ||
Inventory [Line Items] | ||
Other assets | 2,773 | 1,631 |
Raw Materials | ||
Inventory [Line Items] | ||
Total inventory and printed circuit board assemblies | 839 | 629 |
Finished Goods | ||
Inventory [Line Items] | ||
Total inventory and printed circuit board assemblies | $ 3,324 | $ 2,147 |
Balance Sheet Components - Co50
Balance Sheet Components - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 6,304 | $ 3,119 |
Less: accumulated depreciation and amortization | (1,651) | (1,083) |
Total property and equipment, net | 4,653 | 2,036 |
Laboratory and Manufacturing Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 1,509 | 1,130 |
Computer Equipment and Software | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 736 | 538 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 657 | 114 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 502 | 344 |
Internal-Use Software | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 2,900 | $ 993 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 568 | $ 492 | $ 242 |
Balance Sheet Components - Co52
Balance Sheet Components - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables And Accruals [Abstract] | ||
Accrued vacation | $ 1,642 | $ 1,250 |
Accrued payroll and related expenses | 6,179 | 3,838 |
Accrued professional services fees | 636 | 652 |
Other | 1,708 | 959 |
Total accrued liabilities | $ 10,165 | $ 6,699 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - Kaiser - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Revenue recognized | $ 2,500,000 | $ 1,800,000 | $ 1,400,000 |
Amounts receivable from transaction | 449,000 | 366,000 | |
Additional service related expenses | 614,000 | 597,000 | $ 193,000 |
Accounts payable and accrued liabilities | $ 229,000 | $ 261,000 | |
Convertible Preferred Stock | |||
Related Party Transaction [Line Items] | |||
Convertible preferred stock, ownership percentage | 6.10% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2,017 | $ 4,678 |
2,018 | 4,712 |
2,019 | 4,721 |
2,020 | 782 |
Total | $ 14,893 |
Commitments and Contingencies55
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent Expense | $ 3.1 | $ 1.6 | $ 1.3 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2017USD ($) | Dec. 31, 2015USD ($)Tranche | Jun. 30, 2014USD ($)$ / sharesshares | Nov. 30, 2012USD ($)$ / sharesshares | Dec. 31, 2021USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)$ / shares | Dec. 01, 2016USD ($) | Aug. 31, 2016USD ($) | Dec. 04, 2015USD ($) | Jun. 30, 2015$ / sharesshares | |
Debt Instrument [Line Items] | ||||||||||||
Repayment of bank debt | $ 4,905,000 | $ 4,500,000 | ||||||||||
Debt balance | $ 46,332,000 | |||||||||||
Proceeds from long-term debt, net of issuance costs | 29,018,000 | $ 4,905,000 | ||||||||||
CHCF Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt balance | $ 1,400,000 | $ 1,500,000 | 1,400,000 | |||||||||
Proceeds from long-term debt, net of issuance costs | $ 1,500,000 | |||||||||||
Exercise price of warrants | $ / shares | $ 16.39 | |||||||||||
Debt instrument accrues simple interest rate | 2.00% | |||||||||||
Debt instrument maturity date | Nov. 30, 2016 | |||||||||||
Debt instrument extended maturity date | May 31, 2018 | |||||||||||
Series D Preferred Stock | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants issued to purchase shares | shares | 20,136 | |||||||||||
Exercise price of warrants | $ / shares | $ 7.31 | |||||||||||
Series D Preferred Stock | CHCF Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants issued to purchase shares | shares | 22,807 | 8,552 | ||||||||||
Exercise price of warrants | $ / shares | $ 6.58 | |||||||||||
Series D Convertible Preferred Stock | CHCF Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants issued to purchase shares | shares | 22,807 | 8,552 | ||||||||||
Exercise price of warrants | $ / shares | $ 6.58 | |||||||||||
Pharmakon Loan Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 55,000,000 | 55,000,000 | ||||||||||
Number of tranches for loans | Tranche | 2 | |||||||||||
Paid in kind, interest percentage | 50.00% | |||||||||||
Debt instrument, covenant description | The Company is subject to a financial covenant related to minimum trailing revenue targets that begins in June 2017, and is tested on a semi-annual basis. The minimum net revenue covenant ranges from $44.7 million for the period ended June 30, 2017 to $102.6 million for the period ended December 31, 2021. The minimum net revenues financial covenant has a 45-day equity cure period following required delivery date of the financial statements. | |||||||||||
Debt instrument, covenant equity cure period | 45 days | |||||||||||
Debt instrument, maturity period | 2021-12 | |||||||||||
Debt balance | $ 29,100,000 | $ 30,800,000 | 29,100,000 | |||||||||
Pharmakon Loan Agreement | Silicon Valley Bank | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayment of bank debt | 4,900,000 | |||||||||||
Pharmakon Loan Agreement | Scenario Forecast | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, covenant compliance minimum net revenue target next twelve months | $ 44,700,000 | |||||||||||
Debt instrument, covenant compliance minimum net revenue fifth year | $ 102,600,000 | |||||||||||
Pharmakon Loan Agreement | Tranche A Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 30,000,000 | |||||||||||
Debt instrument, fixed interest rate | 9.50% | |||||||||||
Debt instrument, periodic payment | quarterly | |||||||||||
Debt instrument, interest due and payable | 50.00% | |||||||||||
Pharmakon Loan Agreement | Tranche B Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||||
Loan and Security Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from long-term debt, net of issuance costs | $ 4,900,000 | |||||||||||
Debt borrowed additional advance | $ 5,000,000 | |||||||||||
Repayment of debt | 4,900,000 | |||||||||||
Loan and Security Agreement | Series D Preferred Stock | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants issued to purchase shares | shares | 20,136 | |||||||||||
Exercise price of warrants | $ / shares | $ 7.31 | |||||||||||
Warrants expiry period | 2024-06 | |||||||||||
SVB Loan Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 15,000,000 | 15,000,000 | ||||||||||
Credit facility expiration date | Dec. 4, 2018 | |||||||||||
Debt instrument variable rate basis period of net sales | 12 months | |||||||||||
Borrowing capacity description | Any principal amount outstanding under the SVB revolving credit line will bear interest at a floating rate per annum equal to the rate published by The Wall Street Journal as the “Prime Rate” plus 0.25%. The Company may borrow up to 80% of its eligible accounts receivable, up to the maximum of $15.0 million. | |||||||||||
SVB Loan Agreement | Standby Letters of Credit | San Francisco Office | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Letter of credit | $ 3,100,000 | |||||||||||
SVB Loan Agreement | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of eligible accounts receivable for borrowings | 80.00% | |||||||||||
Credit facility borrowing capacity | $ 2,900,000 | $ 2,500,000 | $ 2,900,000 | |||||||||
SVB Loan Agreement | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument interest rate spread | 0.25% |
Debt - Schedule of Future Minim
Debt - Schedule of Future Minimum Payments under CHCF Note and Pharmakon Loan (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 1,549 |
2,018 | 4,858 |
2,019 | 3,192 |
2,020 | 19,169 |
2,021 | 17,564 |
Total | 46,332 |
Less: Amount representing interest | (13,241) |
Less: Amount representing debt discount and issuance costs | (864) |
Present value of minimum payments | $ 32,227 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | |||
Provision or benefit for income taxes | $ 0 | $ 0 | $ 0 |
Benefit recognized for net operating loss carryforwards | 0 | ||
Benefit recognized for other deferred tax assets | 0 | ||
Net operating loss carryforwards | 104,600,000 | ||
Net operating loss carryforwards | 58,600,000 | ||
Tax credit carryforward | 1,300,000 | ||
Tax credit carryforwards available to reduce future taxable income | $ 1,200,000 | ||
Tax credit carryforwards expiration beginning year | 2,027 | ||
Accrual for interest or penalties related to unrecognized tax benefits | $ 0 | $ 0 | |
Federal | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carry forwards expiration year | 2,027 | ||
State | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carry forwards expiration year | 2,017 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | |||
Tax at statutory federal rate | $ (7,107,000) | $ (7,752,000) | $ (5,365,000) |
State taxes, net of federal benefit | 3,000 | ||
Stock-based compensation | 255,000 | 251,000 | 281,000 |
Other | 916,000 | (128,000) | 166,000 |
Tax credits | (139,000) | (178,000) | (168,000) |
Change in valuation allowance | 6,075,000 | 7,807,000 | 5,083,000 |
Provision for income taxes | $ 0 | $ 0 | $ 0 |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences and Carryforwards of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 38,694 | $ 34,714 | $ 27,318 |
Tax credit carryforwards | 1,587 | 1,728 | 1,388 |
Allowances and other | 4,787 | 2,024 | 807 |
Depreciation and amortization | (207) | 99 | 357 |
Total deferred tax assets | 44,861 | 38,565 | 29,870 |
Valuation allowance | (44,861) | (38,565) | (29,870) |
Net deferred tax assets | $ 0 | $ 0 | $ 0 |
Income Taxes - Reconciliation61
Income Taxes - Reconciliation of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns Roll Forward | |||
Balance at beginning of year | $ 570 | $ 460 | $ 364 |
Additions for tax positions taken in current year | 75 | 110 | 96 |
Decreases in balances related to prior year tax position | (29) | ||
Balance at end of year | $ 616 | $ 570 | $ 460 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 25, 2016 | Dec. 31, 2015 | |
Class Of Stock [Line Items] | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 18,528,913 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 11,392,882 | ||
Dividends declared | $ 0 | ||
Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 0 | 5,000,000 | 11,392,882 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule Of Common Stock Shares Reserved For Future Issuance (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 7,526,060 | 16,689,946 |
Convertible Preferred Stock | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 13,343,981 | |
Convertible Preferred Stock Warrants | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 328,114 | |
Common stock warrants issued | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 217,245 | |
Options Issued and Outstanding | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 2,977,218 | 2,685,913 |
RSUs Issued and Unvested | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 105,529 | |
Shares Available for Grant Under Future Stock Plans | ||
Class Of Stock [Line Items] | ||
Total number of shares reserved for future issuance | 4,226,068 | 331,938 |
Convertible Preferred Stock - A
Convertible Preferred Stock - Additional Information(Details) - USD ($) | Oct. 19, 2016 | Oct. 31, 2016 | Dec. 31, 2016 |
Class Of Stock [Line Items] | |||
Dividends declared | $ 0 | ||
Proceeds from stock issuance, net of underwriting discounts and commissions | $ 114,436,000 | ||
Minimum | |||
Class Of Stock [Line Items] | |||
Percentage of outstanding preferred shares and holders voting together as single class on an as-if converted to common stock basis | 63.00% | ||
Initial Public Offering | |||
Class Of Stock [Line Items] | |||
Proceeds from stock issuance, net of underwriting discounts and commissions | $ 110,700,000 | ||
Convertible Preferred Stock | Initial Public Offering | |||
Class Of Stock [Line Items] | |||
Conversion of convertible preferred stock to common stock in connection with initial public offering, Shares | (11,077,505) | (11,077,505) | |
Series E Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 0.71 | ||
Percentage of liquidation preference on purchase price plus any declared but unpaid dividends | 100.00% | ||
Convertible preferred stock conversion percentage | 100.00% | ||
Convertible preferred stock conversion basis | one-for-one basis | ||
Series D Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 0.59 | ||
Percentage of liquidation preference on purchase price plus any declared but unpaid dividends | 150.00% | ||
Convertible preferred stock conversion percentage | 100.00% | ||
Convertible preferred stock conversion basis | one-for-one basis | ||
Series B Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 1.29 | ||
Percentage of liquidation preference on purchase price plus any declared but unpaid dividends | 100.00% | ||
Convertible preferred stock conversion percentage | 49.89053% | ||
Convertible preferred stock conversion basis | one-for-2.00438849 | ||
Series C Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 1.29 | ||
Percentage of liquidation preference on purchase price plus any declared but unpaid dividends | 150.00% | ||
Convertible preferred stock conversion percentage | 44.50666% | ||
Convertible preferred stock conversion basis | one-for-2.24685484 | ||
Series A Convertible Preferred Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 0.47 | ||
Percentage of liquidation preference on purchase price plus any declared but unpaid dividends | 100.00% | ||
Convertible preferred stock conversion percentage | 100.00% | ||
Convertible preferred stock conversion basis | one-for-one basis | ||
Common Stock | |||
Class Of Stock [Line Items] | |||
Dividend rate per share | $ 0 | ||
Common Stock | Initial Public Offering | |||
Class Of Stock [Line Items] | |||
Conversion of convertible preferred stock to common stock in connection with initial public offering, Shares | 13,375,333 | 13,375,333 | |
Common Stock | Initial Public Offering | Maximum | |||
Class Of Stock [Line Items] | |||
Common stock offering price per share | $ 17.65 | ||
Proceeds from stock issuance, net of underwriting discounts and commissions | $ 40,000,000 |
Convertible Preferred Stock - S
Convertible Preferred Stock - Summary of Convertible Preferred Stock Offerings (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Temporary Equity [Line Items] | |
Temporary equity, shares authorized | 11,392,882 |
Temporary equity, shares issued | 11,046,146 |
Temporary equity, shares outstanding | 11,046,146 |
Number of shares converted into common stock | 13,343,981 |
Temporary equity, liquidation preference | $ | $ 117,495 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 97,096 |
Series A Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock, Original Issue Price | $ / shares | $ 5.67 |
Temporary equity, shares authorized | 3,415,649 |
Temporary equity, shares issued | 3,390,963 |
Temporary equity, shares outstanding | 3,390,963 |
Number of shares converted into common stock | 3,390,963 |
Temporary equity, liquidation preference | $ | $ 19,236 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 19,134 |
Series B Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock, Original Issue Price | $ / shares | $ 16.39 |
Temporary equity, shares authorized | 623,254 |
Temporary equity, shares issued | 610,134 |
Temporary equity, shares outstanding | 610,134 |
Number of shares converted into common stock | 1,222,944 |
Temporary equity, liquidation preference | $ | $ 10,000 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 9,855 |
Series C Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock, Original Issue Price | $ / shares | $ 16.39 |
Temporary equity, shares authorized | 1,360,582 |
Temporary equity, shares issued | 1,351,423 |
Temporary equity, shares outstanding | 1,351,423 |
Number of shares converted into common stock | 3,036,448 |
Temporary equity, liquidation preference | $ | $ 33,224 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 21,953 |
Series D Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock, Original Issue Price | $ / shares | $ 7.31 |
Temporary equity, shares authorized | 2,627,595 |
Temporary equity, shares issued | 2,327,897 |
Temporary equity, shares outstanding | 2,327,897 |
Number of shares converted into common stock | 2,327,897 |
Temporary equity, liquidation preference | $ | $ 25,516 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 16,843 |
Series E Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock, Original Issue Price | $ / shares | $ 8.77 |
Temporary equity, shares authorized | 3,365,802 |
Temporary equity, shares issued | 3,365,729 |
Temporary equity, shares outstanding | 3,365,729 |
Number of shares converted into common stock | 3,365,729 |
Temporary equity, liquidation preference | $ | $ 29,519 |
Convertible preferred stock, Proceeds Net of Issuance Costs | $ | $ 29,311 |
Preferred Stock Warrant Liabi66
Preferred Stock Warrant Liabilities - Additional Information (Details) - USD ($) | Oct. 26, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Apr. 30, 2013 | Dec. 31, 2012 | Nov. 30, 2012 | Feb. 28, 2011 | May 31, 2010 | Nov. 30, 2009 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 27, 2013 |
Class Of Warrant Or Right [Line Items] | |||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 2,123,000 | $ 111,000 | $ 291,000 | ||||||||||
CHCF Note | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Exercise price of warrants | $ 16.39 | ||||||||||||
Fair value assumptions, expected volatility rate | 60.00% | ||||||||||||
Fair value assumptions, risk free interest rate | 1.60% | ||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 153,000 | $ 50,000 | 14,000 | 24,000 | |||||||||
Warrant exercise period | Oct. 3, 2016 | ||||||||||||
Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 237,000 | 14,000 | (4,000) | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 7,310 | ||||||||||||
Fair value warrants recorded as debt discount | $ 98,000 | ||||||||||||
Fair value assumptions, discount rate | 30.00% | ||||||||||||
Warrant exercised | 10,068 | ||||||||||||
Warrants outstanding | 10,068 | ||||||||||||
Warrant [Member] | CHCF Note | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 19,000 | 6,000 | |||||||||||
Warrant exercise period | Oct. 3, 2016 | ||||||||||||
Fair value warrants recorded as debt discount | $ 44,000 | ||||||||||||
Warrant [Member] | CHCF Note | Minimum | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, discount rate | 13.00% | ||||||||||||
Warrant [Member] | CHCF Note | Maximum | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, discount rate | 27.00% | ||||||||||||
Series D Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 20,136 | ||||||||||||
Exercise price of warrants | $ 7.31 | ||||||||||||
Series D Preferred Stock | CHCF Note | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 8,552 | 22,807 | |||||||||||
Exercise price of warrants | $ 6.58 | ||||||||||||
Series D Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Jun. 30, 2024 | ||||||||||||
Series D Preferred Stock | Warrant [Member] | CHCF Note | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Description of warrants expiration period | expire at the earlier of November 2022 or a liquidation event | ||||||||||||
Series C Convertible Preferred Stock | CHCF Note | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 150,000 | ||||||||||||
Description of warrants expiration period | expire at the earlier of November 2022 or a liquidation event | ||||||||||||
Warrants issued to purchase preferred stock | 9,152 | ||||||||||||
Series C Convertible Preferred Stock | CHCF Note | Minimum | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Proceeds from issuance of warrants | $ 500,000 | ||||||||||||
2009 Loan Agreement One | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, expected volatility rate | 70.00% | ||||||||||||
Fair value assumptions, risk free interest rate | 2.20% | ||||||||||||
Fair value assumptions, exercise price | $ 5.67 | ||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||
Fair value warrants recorded as debt issuance cost | $ 68,000 | ||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 182,000 | 38,000 | 28,000 | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 12,491 | ||||||||||||
2009 Loan Agreement One | Series A Convertible Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 15,865 | ||||||||||||
Exercise price of warrants | $ 5.67 | ||||||||||||
2009 Loan Agreement One | Series A Convertible Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Nov. 30, 2019 | ||||||||||||
2009 Loan Agreement Two | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, expected volatility rate | 70.00% | ||||||||||||
Fair value assumptions, risk free interest rate | 2.20% | ||||||||||||
Fair value assumptions, exercise price | $ 5.67 | ||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 101,000 | 22,000 | 15,000 | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 6,939 | ||||||||||||
Fair value warrants recorded as debt discount | $ 38,000 | ||||||||||||
2009 Loan Agreement Two | Series A Convertible Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 8,813 | ||||||||||||
Exercise price of warrants | $ 5.67 | ||||||||||||
2009 Loan Agreement Two | Series A Convertible Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Nov. 30, 2019 | ||||||||||||
2010 Loan Agreement | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, expected volatility rate | 60.00% | ||||||||||||
Fair value assumptions, risk free interest rate | 2.80% | ||||||||||||
Fair value assumptions, exercise price | $ 16.39 | ||||||||||||
Fair value assumptions, expected term | 9 years 6 months | ||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 14,000 | 5,000 | 4,000 | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 2,119 | ||||||||||||
Fair value warrants recorded as debt discount | $ 19,000 | ||||||||||||
2010 Loan Agreement | Series B Convertible Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 1,525 | ||||||||||||
Exercise price of warrants | $ 16.39 | ||||||||||||
2010 Loan Agreement | Series B Convertible Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Nov. 30, 2019 | ||||||||||||
2011 Loan Agreement | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Fair value assumptions, expected volatility rate | 60.00% | ||||||||||||
Fair value assumptions, risk free interest rate | 3.40% | ||||||||||||
Fair value assumptions, exercise price | $ 16.39 | ||||||||||||
Fair value assumptions, expected term | 10 years | ||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 104,000 | 42,000 | 29,000 | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 16,113 | ||||||||||||
Fair value warrants recorded as debt discount | $ 121,000 | ||||||||||||
2011 Loan Agreement | Series B Convertible Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 11,592 | ||||||||||||
Exercise price of warrants | $ 16.39 | ||||||||||||
2011 Loan Agreement | Series B Convertible Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Feb. 28, 2021 | ||||||||||||
2012 Loan Agreement | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Exercise price of warrants | $ 0.01 | ||||||||||||
2012 Loan Agreement | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 1,199,000 | (42,000) | 178,000 | ||||||||||
Warrants term | 7 years | ||||||||||||
2012 Loan Agreement | Series D Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 207,177 | ||||||||||||
2013 Loan Agreement | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Change in fair value of preferred stock warrant liabilities | $ 217,000 | $ 12,000 | $ 19,000 | ||||||||||
Warrant exercise period | Oct. 26, 2016 | ||||||||||||
Issuance of common stock upon exercise of warrants, Shares | 13,414 | ||||||||||||
Fair value warrants recorded as debt discount | $ 72,000 | ||||||||||||
Fair value assumptions, discount rate | 22.00% | ||||||||||||
2013 Loan Agreement | Series D Preferred Stock | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants issued to purchase shares | 18,474 | ||||||||||||
Exercise price of warrants | $ 7.31 | ||||||||||||
2013 Loan Agreement | Series D Preferred Stock | Warrant [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants expiry period | Apr. 30, 2023 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2016shares | Dec. 31, 2016USD ($)Period$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options granted during the period | 361,385 | 915,080 | 429,474 | |
Shares available for future issuance | 7,526,060 | 16,689,946 | ||
Expected term | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Weighted-average grant date fair value of options | $ / shares | $ 8.76 | $ 4.08 | $ 2.20 | |
Stock option, intrinsic value | $ | $ 654,000 | $ 237,000 | $ 96,000 | |
Estimated grant date fair value of stock option vested | $ | $ 1,800,000 | $ 1,100,000 | $ 869,000 | |
2006 Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option plan, description | Options under the Plan may be granted for periods of up to ten years and at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% and 85% of the estimated fair value of the shares on the date of grant, respectively, and (ii) the exercise price of an ISO and NSO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. | |||
Stock option vesting term | 3 years | |||
2006 Equity Incentive Plan | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, period for grant | 10 years | |||
2006 Equity Incentive Plan | Maximum | ISO | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option vesting term | 5 years | |||
2006 Equity Incentive Plan | Maximum | Other Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option vesting term | 10 years | |||
2006 Equity Incentive Plan | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, purchase price percentage of estimated fair value | 85.00% | |||
Percentage of voting power of all classes of stock | 10.00% | |||
2006 Equity Incentive Plan | Minimum | ISO | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, purchase price percentage of estimated fair value | 100.00% | |||
2006 Equity Incentive Plan | Minimum | NSO | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, purchase price percentage of estimated fair value | 85.00% | |||
2006 Equity Incentive Plan | Minimum | ISO and NSO Granted to a 10% Stockholder | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, purchase price percentage of estimated fair value | 110.00% | |||
2016 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option plan, description | On the first day of each year beginning with 2017, the 2016 Plan authorizes an annual increase of the least of 3,865,000 shares, 5% of outstanding shares on the last day of the immediately preceding fiscal year or an amount as determined by the Company's Board of Directors. | |||
Effective date | Oct. 19, 2016 | |||
Options granted during the period | 0 | |||
Shares available for future issuance | 3,865,000 | 3,743,037 | ||
Percentage of outstanding shares increased annually under the plan | 5.00% | |||
2016 Plan | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, period for grant | 10 years | |||
2016 Plan | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of stock option exercise price of fair market value of common stock | 100.00% | |||
Employee Stock Purchase Program (“ESPP”) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock option, purchase price percentage of estimated fair value | 85.00% | |||
Effective date | Oct. 19, 2016 | |||
Shares available for future issuance | 483,031 | 483,031 | ||
Percentage of outstanding shares increased annually under the plan | 1.50% | |||
Increase in shares available for future issuance | 966,062 | |||
Offering period | 12 months | |||
Number of purchase period | Period | 2 | |||
Purchase period | 6 months | |||
Common stock issued to employees | 0 | |||
Expected volatility, minimum | 53.21% | |||
Expected volatility, maximum | 57.69% | |||
Risk-free interest rate, minimum | 0.52% | |||
Risk-free interest rate, maximum | 0.68% | |||
Expected dividend yield | 0.00% | |||
Employee Stock Purchase Program (“ESPP”) | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of payroll deductions of eligible compensation | 15.00% | |||
Expected term | 1 year 1 month 13 days | |||
Employee Stock Purchase Program (“ESPP”) | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term | 7 months 10 days |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Share-based Awards Available for Grant (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Shares Available for Grant, Beginning balance | 331,938 | 347,814 | 382,071 |
Shares Available for Grant, Additional options authorized | 3,865,000 | 781,954 | 356,979 |
Shares Available for Grant, Options granted | (466,914) | (915,080) | (429,474) |
Shares Available for Grant, Options forfeited | 13,013 | 117,250 | 38,238 |
Shares Available for Grant, Ending balance | 3,743,037 | 331,938 | 347,814 |
Stock Incentive Plans - Summa69
Stock Incentive Plans - Summary of Stock Option Activity Under 2006 and 2016 Plans, Including Grants To Nonemployees (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Options Outstanding, Beginning balance | 2,685,913 | 1,972,383 | 1,620,129 | |
Options granted | 361,385 | 915,080 | 429,474 | |
Options exercised | (57,067) | (84,300) | (38,982) | |
Options forfeited | (13,013) | (117,250) | (38,238) | |
Options Outstanding, Ending balance | 2,977,218 | 2,685,913 | 1,972,383 | 1,620,129 |
Options exercisable | 1,940,798 | |||
Options vested and expected to vest | 2,912,854 | |||
Options Outstanding, Weighted Average Exercise Price Per Share, Beginning Balance | $ 4.81 | $ 3.70 | $ 3.59 | |
Options Outstanding, Weighted Average Exercise Price Per Share, Options granted | 15.65 | 3.98 | 3.86 | |
Options Outstanding, Weighted Average Exercise Price Per Share, Options exercised | 2.33 | 3.71 | 1.30 | |
Options Outstanding, Weighted Average Exercise Price Per Share, Options forfeited | 6.92 | 3.94 | 3.34 | |
Options Outstanding, Weighted Average Exercise Price Per Share, Ending Balance | 6.16 | $ 4.81 | $ 3.70 | $ 3.59 |
Options Outstanding, Weighted Average Exercise Price Per Share, Exercisable | 4.35 | |||
Options Outstanding, Weighted Average Exercise Price Per Share, vested and expected to vest | $ 6.06 | |||
Options Outstanding, Weighted- Average Remaining Contractual Life (years) | 6 years 11 months 5 days | 7 years 7 months 17 days | 7 years 10 months 10 days | 8 years 2 months 12 days |
Options exercisable, Weighted- Average Remaining Contractual Life (years) | 6 years 3 months | |||
Options vested and expected to vest, Weighted- Average Remaining Contractual Life (years) | 7 years 22 days | |||
Options Outstanding, Aggregate Intrinsic Value | $ 70,979 | $ 11,589 | $ 4,191 | |
Options exercisable, Aggregate Intrinsic Value | 49,775 | |||
Options vested and expected to vest, Aggregate Intrinsic Value | $ 69,746 |
Stock Incentive Plans - Summa70
Stock Incentive Plans - Summary of Nonvested Restricted Stock Units ("RSUs") (Details) - Restricted Stock Units ("RSUs") $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares Underlying RSUs, Nonvested, Beginning balance | shares | 0 |
Shares Underlying RSUs, Granted | shares | 105,529 |
Shares Underlying RSUs, Nonvested, Ending balance | shares | 105,529 |
Shares Underlying RSUs, Nonvested Outstanding, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 0 |
Shares Underlying RSUs, Granted, Weighted Average Grant Date Fair Value | $ / shares | 27.39 |
Shares Underlying RSUs, Nonvested Outstanding, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 27.39 |
Shares Underlying RSUs, Nonvested Weighted Remaining Vesting Period (in years) | 2 years 1 month 13 days |
Shares Underlying RSUs, Nonvested, Aggregate Intrinsic Value | $ | $ 3,166 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value of Employee Stock Options Estimated Using Weighted Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Expected volatility | 60.00% | 60.00% | 60.00% |
Risk-free interest rate | 1.42% | 1.76% | 2.08% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Total unamortized compensation costs, net of estimated forfeitures related to unvested stock options | $ 5.1 | ||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 2 years 10 months 24 days | ||
Restricted Stock Units ("RSUs") | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total unamortized compensation costs, net of estimated forfeitures related to unvested stock options | $ 2.8 | ||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 2 years 1 month 6 days | ||
ESPP | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total unamortized compensation costs, net of estimated forfeitures related to unvested stock options | $ 1.9 | ||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 11 months 1 day |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Total Stock-Based Compensation Expense for Options, RSUs and ESPP Included in Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 1,871 | $ 1,410 | $ 828 |
Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 17 | 17 | 15 |
Research and development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 203 | 165 | 80 |
Selling, general and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 1,651 | $ 1,228 | $ 733 |
Net Loss Per Common Share - Com
Net Loss Per Common Share - Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net Loss | $ (6,266) | $ (4,075) | $ (4,436) | $ (6,126) | $ (7,702) | $ (5,746) | $ (4,959) | $ (4,392) | $ (20,903) | $ (22,799) | $ (15,832) |
Denominator: | |||||||||||
Weighted-average shares used to compute net loss per common share, basic and diluted | 5,285,847 | 1,376,106 | 1,314,294 | ||||||||
Net loss per common share, basic and diluted | $ (0.37) | $ (2.80) | $ (3.12) | $ (4.34) | $ (5.46) | $ (4.07) | $ (3.66) | $ (3.31) | $ (3.95) | $ (16.57) | $ (12.05) |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Anti-dilutive Securities Excluded from Diluted Net Loss per Common Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 3,299,992 | 16,358,008 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 13,343,981 | |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 2,977,218 | 2,685,913 |
RSUs Issued and Unvested | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 105,529 | |
Warrants to Purchase Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 328,114 | |
Warrants to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from diluted net loss per common share | 217,245 |
Selected Quarterly Financial 76
Selected Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 18,704 | $ 16,780 | $ 15,734 | $ 12,854 | $ 10,854 | $ 9,344 | $ 8,887 | $ 7,055 | $ 64,072 | $ 36,140 | $ 21,749 |
Gross profit | 12,918 | 11,498 | 10,578 | 8,195 | 6,693 | 5,596 | 5,269 | 3,882 | 43,189 | 21,440 | 11,158 |
Net Loss | $ (6,266) | $ (4,075) | $ (4,436) | $ (6,126) | $ (7,702) | $ (5,746) | $ (4,959) | $ (4,392) | $ (20,903) | $ (22,799) | $ (15,832) |
Net loss per common share, basic and diluted | $ (0.37) | $ (2.80) | $ (3.12) | $ (4.34) | $ (5.46) | $ (4.07) | $ (3.66) | $ (3.31) | $ (3.95) | $ (16.57) | $ (12.05) |